[00:00:00] Speaker 02: The next case for argument is 24-1658, United Therapeutics Corporation v. Lacuidia. [00:01:03] Speaker 05: Good morning. [00:01:03] Speaker 05: May it please the court. [00:01:05] Speaker 05: I'm Doug Carson on behalf of United Therapeutics. [00:01:08] Speaker 05: I'd like to start with three points that I think are significant. [00:01:11] Speaker 02: Before you do that, and I will let you do that, and this isn't going to take too much time, but you started this. [00:01:16] Speaker 02: You gave us a 28-J letter at the end of last week about the FDA. [00:01:20] Speaker 02: I mean, maybe I missed something, but I had been assuming all along, based on your request for a stay and the arguments of irreparable harm and so forth, [00:01:28] Speaker 02: that the district court's vacating of the injunction was having some immediate effect on what happened with the FDA, etc. [00:01:36] Speaker 02: I don't understand the details of this, but the suggestion is, I guess, that that wasn't a correct assumption. [00:01:43] Speaker 02: So can you just tell me what's going on with the FDA? [00:01:46] Speaker 05: Absolutely. [00:01:47] Speaker 05: As Your Honors are aware from the Hatch-Waxman line of cases, there's a whole bunch of exclusivity wrinkles that go on. [00:01:53] Speaker 05: Some are patent and some are regulatory. [00:01:56] Speaker 05: In this circumstance, the FDA very recently, shortly before the issuance of the Rule 28j letter, [00:02:04] Speaker 05: indicated that they had provided a new exclusivity to my client United Therapeutics product, which if taken would preclude final approval to Liquidia's product until May of 2025. [00:02:19] Speaker 02: And what effect, if any, does the vacating of the injunction [00:02:26] Speaker 02: Or are they operating because we haven't yet affirmed or reversed that? [00:02:30] Speaker 02: Are they waiting for us? [00:02:31] Speaker 02: I mean, what does the FDA do then, if let's assume we affirm the injunction? [00:02:39] Speaker 02: It's a very firm vacating the injunction. [00:02:41] Speaker 02: Does that automatically change this? [00:02:44] Speaker 02: Or is this kind of a separate thing going on? [00:02:46] Speaker 05: This is a separate thing going on. [00:02:48] Speaker 05: I would note, though, Your Honor, so the vacating of the injunction would independently prevent the FDA. [00:02:56] Speaker 05: I'm sorry. [00:02:58] Speaker 05: Restoring the E4A order would prevent the FDA from approving finally the liquidity of product up until either the patent goes away, i.e. [00:03:11] Speaker 05: it's canceled, or the patent expires, which would be 2027. [00:03:16] Speaker 05: This separate act by the FDA is a separate act of exclusivity, and it maintains that Liquideus product could not be approved until May of 2025. [00:03:30] Speaker 05: So it is separate and distinct. [00:03:32] Speaker 05: The terms of these potential exclusivities are different, however, Your Honor. [00:03:38] Speaker 05: And I would note that their liquidity did sue the FDA over that exclusivity, claiming that it was wrongly submitted. [00:03:46] Speaker 05: And the District of Columbia District Court has issued a scheduling order on an expedited summary judgment basis, where that will be heard in December, I believe December 5. [00:03:58] Speaker 05: of this year. [00:03:58] Speaker 01: Council, just so I make sure I understand correctly, even if we affirm the district court, you're saying liquidity cannot get on the market with this product before May 2025? [00:04:09] Speaker 05: Unless something happens with the District of Columbia, where in December it decides that the exclusivity was improvidently granted by FDA. [00:04:22] Speaker 05: So there is an option for it. [00:04:23] Speaker 02: Well, you mentioned, though, I was a little confused by saying it again. [00:04:25] Speaker 02: I don't want to promise this will be my last question. [00:04:28] Speaker 02: You mentioned, what if we affirm and the PTO cancels? [00:04:36] Speaker 02: Does that affect the FDA? [00:04:38] Speaker 02: Does the FDA then, does that change its conduct with respect to our case and this other exclusivity, this other thing? [00:04:48] Speaker 05: The cancellation of the patent would have no effect on the other regulatory exclusivity that the FDA [00:04:59] Speaker 05: has issued and what Liquidea is fighting about in terms of the District of Columbia. [00:05:04] Speaker 05: They are two separate pathways, judging. [00:05:06] Speaker 02: All right. [00:05:06] Speaker 02: Why don't we restart the clock, and we'll let your friend know if he has anything to say about that. [00:05:11] Speaker 02: We'd like to hear that, and then we will start you. [00:05:13] Speaker 02: Sure. [00:05:13] Speaker 02: So why don't we restart the clock? [00:05:14] Speaker 02: All right. [00:05:15] Speaker 02: Back to your three points. [00:05:16] Speaker 05: Well, thank you, and may it please the court. [00:05:19] Speaker 05: I'd like to start with three points here. [00:05:21] Speaker 05: First, the 793 patent is in force today. [00:05:25] Speaker 05: It is not expired. [00:05:27] Speaker 05: It is not canceled. [00:05:28] Speaker 05: It was infringed, affirmed infringed, and a mandate was tendered by this court back to the district court. [00:05:37] Speaker 05: We have rights in that patent today. [00:05:40] Speaker 05: An E4A order, it requires an unexpired patent that has been adjudicated infringed by a district court. [00:05:48] Speaker 05: We have that standing here today. [00:05:50] Speaker 02: Or if in the meantime, there's been a passage of time here, some other generic comes in and prevails before the district court in an invalidity case. [00:05:59] Speaker 02: Are you saying that the E4 still would preclude anything being done until the expiration of the patent? [00:06:06] Speaker 05: Well, certainly that's not the case that we have before us. [00:06:09] Speaker 02: I wouldn't ask the question. [00:06:11] Speaker 05: Understood. [00:06:12] Speaker 05: But the statutes and regulations from Hatch-Waxman treat district court invalidity different than they do unpatentability fines. [00:06:25] Speaker 02: So is the answer yes? [00:06:28] Speaker 02: I want to look to make sure, but I believe [00:06:44] Speaker 05: Under XY infracineus, it ought not have any effect because of the finality of the final judgment below in the earlier case, assuming there's no co-pendency of those cases. [00:06:56] Speaker 05: However, there is a Hatch-Waxman statute, 21 U.S.C. [00:07:01] Speaker 05: 355, which provides that upon affirmance of a district court invalidity or [00:07:08] Speaker 05: a decision of invalidity by district court that has immediate effect that day. [00:07:14] Speaker 02: In other words, it's correct that if another generic came in and got a judgment, maybe a firm bias mandate issued, that the patent was invalid, then they would have the right to go on. [00:07:26] Speaker 02: So all of them have these rights, but the quidia doesn't. [00:07:30] Speaker 05: I believe that's the case. [00:07:31] Speaker 05: I'd want to look at the Hatch-Waxman Act to see if it specifies about whether that could impact a separate case or only the case in which. [00:07:40] Speaker 02: So you're reading E4, and the importance of saying that it only expires at expiration applies only [00:07:49] Speaker 02: to a generic who has come in and not prevailed in his particular case of invalidity before the district court? [00:07:58] Speaker 05: Well, I think, again, we're now talking about a situation where we have a final judgment from the original matter. [00:08:04] Speaker 05: I think the E4A order could be subject to a Rule 60B attack under 60B4 in the case that Your Honor is hypothesizing. [00:08:14] Speaker 05: And that is that the underlying basis for the injunction no longer exists. [00:08:19] Speaker 05: i.e., you have a patent while it's not expired, the patent no longer exists that would support the continuance of the E4A order. [00:08:30] Speaker 02: And the same would be true in your view if the PTO yesterday or today or tomorrow. [00:08:33] Speaker 02: I don't know if you have checked. [00:08:34] Speaker 02: I'm assuming they haven't canceled it yet. [00:08:36] Speaker 05: No, they have not. [00:08:37] Speaker 05: In fact, this is up on appeal. [00:08:40] Speaker 05: Well, a cert petition to the Supreme Court. [00:08:44] Speaker 05: And one justice has asked for a response from liquidity. [00:08:47] Speaker 02: Right. [00:08:47] Speaker 02: I know. [00:08:47] Speaker 02: It's on conference for September 30. [00:08:49] Speaker 02: It should be. [00:08:49] Speaker 05: We may have a decision as early as October. [00:08:53] Speaker 05: And so this is not speculative. [00:08:56] Speaker 05: There may, in fact, be. [00:08:59] Speaker 05: not ever a cancellation of the 793. [00:09:02] Speaker 02: Well, how do you know, except for the fact that you cite return mail and in rate ham and what went down there with respect to the PTO and the registration and the cancellation? [00:09:12] Speaker 02: Do we know? [00:09:13] Speaker 02: I mean, is it on the PTO website what they do? [00:09:16] Speaker 02: Do we know that they are holding this cancellation for Supreme Court review? [00:09:21] Speaker 02: We don't for sure. [00:09:22] Speaker 05: We don't know for sure. [00:09:23] Speaker 05: However, the indications from return mail and from the trademark case that we cite in our appendix, which uses the exact same language, are highly suggestive that the patent office will not cancel a claim before the expiration of Supreme Court review. [00:09:38] Speaker 05: And that's, I think, the return mail. [00:09:41] Speaker 02: I get exactly that from the submissions in the appendix. [00:09:49] Speaker 02: Because in the return mail case, they did issue the cancellation. [00:09:56] Speaker 02: And then they were told that, wait, the Supreme Court is granted review. [00:10:00] Speaker 02: And they said, in light of that order, [00:10:02] Speaker 02: in the decision to grant cert, not the decision to file for cert, but the decision to grant cert, someone called a patent review quality assurance specialist vacated the certificate. [00:10:16] Speaker 05: You're correct, Judge Prost. [00:10:18] Speaker 05: We read that, however, as a broader general policy that the patent office will wait until there's finality of every appeal. [00:10:28] Speaker 02: So we're supposed to take an order from [00:10:31] Speaker 02: before a patent review quality assurance specialist is saying, this is the way that we proceed. [00:10:41] Speaker 02: They didn't proceed that way in this case. [00:10:43] Speaker 02: So they said, OK, we've got to change it in this case, because there's a Florida granting cert. [00:10:47] Speaker 02: And you're saying we should read that as a patent office policy, that they don't grant, they don't issue the certificate. [00:10:56] Speaker 05: Until as long as you file for cert I don't know well as long in so far as the cert petition is pending and If certain is granted then return mail absolutely applies on its face where cancellation would be inappropriate Your yes to keep liquidity as the only entity precluded from practicing the subject matter covered by the seven nine three patent claims and [00:11:22] Speaker 05: Well, Your Honor, I don't believe that they are uniquely situated. [00:11:25] Speaker 05: As I started at the outset, the 793 patent exists today with enforceable rights under E plus and bingo case. [00:11:36] Speaker 05: We could, in theory, assert this patent, the 793 patent, against the generic filer subject to Rule 11 and subject to 35 USC 285 fee issues. [00:11:49] Speaker 01: be able to get over the rule 11 hurdle of asserting the 793 patent as [00:11:54] Speaker 01: It stands now in light of the PTO's decision. [00:11:57] Speaker 05: Well, that issue has not mercifully been presented to the client. [00:12:01] Speaker 05: And I can't speak for what the client would want to do in that circumstance. [00:12:05] Speaker 01: But under your czar, just for my purposes, my hypothetical, pretend your czar, your clients always agree with whatever you say. [00:12:12] Speaker 01: I know this is not necessarily the case. [00:12:14] Speaker 01: Would you feel comfortable asserting the 793 patent claims as it stands now against another party? [00:12:21] Speaker 05: My preference would be probably not to assert it. [00:12:24] Speaker 05: And in fact, Your Honor, because of the XY co-pendency requirement, remember, they had another indication, Liquidia did, that was pending. [00:12:36] Speaker 05: When the PTO written decision came down and the affirmance by the court, [00:12:41] Speaker 05: In that copending case, we removed without prejudice the 793 out of deference to this court's jurisprudence in XY and proscenius. [00:12:51] Speaker 05: And so it's a different issue if we're looking at something that would have a new complaint filing against a new party. [00:13:01] Speaker 05: And in that case, my recommendation, I suspect, all things being equal, would be we probably ought not proceed. [00:13:10] Speaker 05: The issue that the final written decision grappled with was 103, which was withheld strategically from the Hatch-Waxman case. [00:13:21] Speaker 05: And so essentially, what Judge Andrews did here in amending the E4A order to take that away [00:13:30] Speaker 05: He gave liquidity a separate off-ramp while still maintaining all the advantages of the Hatch-Waxman Act. [00:13:40] Speaker 05: And that's a balance that only Congress could make. [00:13:43] Speaker 05: And Congress did not do that when they adopted the AIA. [00:13:47] Speaker 05: The Hatch-Waxman Act, with its carefully balanced generic versus brand, [00:13:53] Speaker 05: Congress chose not to give an off-ramp. [00:13:57] Speaker 02: Let me just move on a little bit. [00:13:58] Speaker 02: Go ahead. [00:13:59] Speaker 02: On the cancellation and the effect of the cancellation, so if the Supreme Court denies cert on October 5, that doesn't change your position, right? [00:14:11] Speaker 02: Because you still need cancellation. [00:14:14] Speaker 05: Right. [00:14:14] Speaker 05: Under this court's case law, the cancellation is what expires the rights. [00:14:17] Speaker 05: And so we would wait for cancellation. [00:14:21] Speaker 02: Does it matter that cancellation is a ministerial event or task? [00:14:27] Speaker 05: I don't believe so. [00:14:29] Speaker 05: You agree it's ministerial? [00:14:32] Speaker 05: Well, standing here today, I can't think of some. [00:14:38] Speaker 05: discretionary acts that might have to happen or some way in which cancellation wouldn't follow. [00:14:44] Speaker 05: So in that sense, yes, I agree, it might be ministerial. [00:14:47] Speaker 05: But ministerial acts are very important across the board. [00:14:50] Speaker 05: Ministerial doesn't mean they're not important. [00:14:52] Speaker 02: Well, I don't know what important means. [00:14:56] Speaker 02: It is a ministerial act. [00:14:58] Speaker 02: So you're saying that it's not the final judgment of this court in which a mandate is issued that somehow cancellation, a non-discretionary ministerial act, trumps or precludes that from having effect. [00:15:13] Speaker 00: It's the case. [00:15:13] Speaker 02: Let's say the PTO loses a document and it doesn't issue a cancellation for a year. [00:15:19] Speaker 02: I mean, what does cancellation do if it's a ministerial act in which there's no discretion? [00:15:24] Speaker 05: Well, Congress said in Section 318B, cancellation is what extinguishes the rights. [00:15:30] Speaker 05: That's the law of this court. [00:15:32] Speaker 05: Now, had liquidity actually pursued its argument before district court, it would never be in that circumstance. [00:15:39] Speaker 05: This is exactly the off ramp that they're looking for by virtue of not having to face a clear and convincing evidence standard. [00:15:47] Speaker 02: But you suggest that some of this stuff is nefarious. [00:15:50] Speaker 02: This is the world we live in. [00:15:51] Speaker 02: And there's nothing nefarious. [00:15:53] Speaker 02: And I'm sure you, for your clients, take full advantage, upfront, in a respectable way, and use all of the vehicles. [00:16:01] Speaker 02: So I mean, you've made a few suggestions here, as if there's something sinister and nefarious in terms of the way things have proceeded here. [00:16:08] Speaker 02: This is the world we live in. [00:16:10] Speaker 05: Your Honor, I am not saying anything deferious has happened. [00:16:13] Speaker 02: What I am- That's the system that's been upheld by the Supreme Court. [00:16:16] Speaker 02: So you're saying that the invalidity decision and the unpatentability decision, unpatentability only becomes, has any meaningful effect [00:16:27] Speaker 02: when cancellation is issued, when the thing is canceled. [00:16:31] Speaker 05: That's exactly right. [00:16:32] Speaker 05: And that's this court's E plus case, Your Honor, and the Inri Bingo case, and the Fresenius case. [00:16:39] Speaker 02: Well, then we never confronted with the issue of whether it's a difference between cancellation or final [00:16:44] Speaker 05: Well, Inri Bingo, I know it's non-precedential, but it's a judgerish decision. [00:16:47] Speaker 05: It actually did address the question of cancellation, that until cancellation, subject matter in the patent still exists. [00:16:55] Speaker 05: So I disagree with that characterization. [00:16:57] Speaker 05: And with respect to [00:17:00] Speaker 05: Yeah, I certainly don't mean to be throwing any stones with respect to the way in which liquidity has litigated this case. [00:17:07] Speaker 05: But those are strategic decisions. [00:17:09] Speaker 05: And under Ackerman, a party's strategic decisions and the place where they find themselves in is something to be considered in terms of equity. [00:17:18] Speaker 05: which Judge Cunningham's question had to do with. [00:17:21] Speaker 02: Well, let's speak of equity. [00:17:22] Speaker 02: Let's go back to maybe her point. [00:17:23] Speaker 02: So I'll let her. [00:17:24] Speaker 01: Yeah, I have one other question before we switch to where Judge Proce wants to go. [00:17:28] Speaker 01: Is there any pertinent legislative history that supports drawing a distinction between invalidity and unpatentability in this case? [00:17:36] Speaker 05: I didn't see anything specific in the legislative history aside from the actual statutory language that was approved. [00:17:44] Speaker 05: So 318B talks about unpatentability and how the effect is cancellation. [00:17:51] Speaker 05: Whereas 21 USC 355 alphabet soup says when the Federal Circuit finds invalidity, [00:18:02] Speaker 05: off of a district court appeal, that has immediate effect that very day. [00:18:07] Speaker 05: And so Congress presumably was aware of these statutes. [00:18:11] Speaker 05: Remember, these are two different balances, one specific to brands and generics and the other for all members of the public and patent owners. [00:18:20] Speaker 05: And there was a choice made in that statutory language [00:18:24] Speaker 05: such that if you decide to go IPR route, you are on your own and you have to wait for cancellation. [00:18:31] Speaker 05: This is the law. [00:18:32] Speaker 05: Whereas if you go Hatch-Waxman, you have the opportunity to take advantage of if there's an affirmance or a finding of invalidity by this court. [00:18:42] Speaker 05: That day, that's operative. [00:18:45] Speaker 05: And that was known and understood. [00:18:48] Speaker 02: I'm well into my time. [00:18:50] Speaker 02: I apologize. [00:18:51] Speaker 02: Well, this is our time, not your time. [00:18:52] Speaker 02: We're going to be very generous with you. [00:18:54] Speaker 02: I'm happy to talk as long as you'd like to. [00:18:56] Speaker 02: All right. [00:18:56] Speaker 02: What about the authority? [00:18:58] Speaker 02: I mean, leaving aside the basis for what the district court said about issue preclusion, what about just a regular 60B5? [00:19:07] Speaker 02: The Supreme Court has been very generous, most recently in Starbucks, in terms of saying the equitable authority and discretion the district court has. [00:19:17] Speaker 02: This is a circumstance of change circumstances. [00:19:20] Speaker 02: There's certainly changed circumstances. [00:19:22] Speaker 02: You and I might disagree about the effect of that. [00:19:25] Speaker 02: Why is this not within the broad, equitable authority of the district court, even absent cancellation, given that the final judgment, a mandate is issued in our case? [00:19:38] Speaker 02: There's been no state of the mandate. [00:19:40] Speaker 02: The district court waited until that. [00:19:42] Speaker 02: I don't know intentionally or unintentionally, but that's the way it turned out. [00:19:45] Speaker 02: Why is that not sufficient for an affirmative? [00:19:48] Speaker 05: Well, Your Honor, I think [00:19:50] Speaker 05: I would respectfully submit that there is one and only one remedy that applies to all of Hatch-Waxman, and it is regulated and mandated by Congress in E4A. [00:20:04] Speaker 05: It is that order. [00:20:05] Speaker 05: And that order submits that if the patent is unexpired and the patent has been infringed, that that is the test for whether the E4A order ought to be maintained. [00:20:18] Speaker 05: I would submit that. [00:20:20] Speaker 05: There really is very little, if any, equitable discretion in a district court in the context of this statutory, congressionally mandated remedy. [00:20:31] Speaker 05: Now, if there were a cancellation order. [00:20:33] Speaker 02: I mean, the court has cases, not our court, the Supreme Court, which talks about shall, and even the word shall being overridden by this necessary and important equitable discretion allowed to the district court. [00:20:47] Speaker 02: Why is that not applied in this circumstance? [00:20:49] Speaker 05: Well, because this is a situation where Congress actually balanced the interests of branded and generic companies and made exactly this determination, that this is the remedy. [00:21:01] Speaker 05: Now, separately, I don't believe. [00:21:04] Speaker 02: We're talking about cancellation, a ministerial act, which is completely nondiscretionary. [00:21:11] Speaker 02: So the issue here is the difference between our final judgment, mandate having issued, [00:21:18] Speaker 02: And the impact of that, whether that can have any impact in establishing a change circumstance without before the cancellation, i.e. [00:21:27] Speaker 02: a ministerial act, which is nondiscretionary. [00:21:30] Speaker 02: That's the issue, right? [00:21:31] Speaker 02: Am I fairly stating it? [00:21:34] Speaker 05: I would submit that the, well, yes, I think I'll agree with that. [00:21:38] Speaker 05: However, I would say that when we're thinking about equity, you need to actually look at the equity. [00:21:45] Speaker 05: And Judge Andrew's decision does not provide any information about balancing any equity here. [00:21:52] Speaker 05: So even though the liquidity had moved under 60B5 and 6, Judge Andrews, the district court here, did not balance any equities in that. [00:22:02] Speaker 02: So you're acknowledging that he would have had authority to do that if he had made a review for abuse of discretion, if he had established, or at least under an abuse of discretion standard, that there were equitable principles that need to be applied here. [00:22:16] Speaker 05: I would submit that the district court has no discretion under 60B5 or 60B6. [00:22:23] Speaker 05: I think under 60B4, which is the injunction is now void, that would be the mechanism once the patent is canceled to go to Judge Andrews or a district court judge. [00:22:36] Speaker 05: Because the operative, the only changed circumstance is either the patent is expired or [00:22:43] Speaker 05: The patent that supports the infringement finding is now gone away. [00:22:49] Speaker 05: And that's 60 before, in my view, Judge. [00:22:53] Speaker 02: Thank you. [00:22:54] Speaker 05: Thank you so much for your time. [00:22:55] Speaker 05: Thank you. [00:22:56] Speaker 02: We'll restore rebuttal time. [00:23:02] Speaker 02: Now, before we start the clock writing, I'll give you the same question as I gave your friend at the beginning about this 28-J letter, which was very confusing to us in the context of what we're doing here. [00:23:16] Speaker 02: Yes. [00:23:16] Speaker 02: Did you have anything to add to what he said? [00:23:18] Speaker 03: Yes. [00:23:18] Speaker 03: Good morning, Your Honors, and may his court sign a strict law for liquidity. [00:23:23] Speaker 03: We do agree that the FDA issue is completely independent of what's going on here. [00:23:30] Speaker 03: Excuse me for a moment. [00:23:38] Speaker 03: The regulatory exclusivity granted by the FDA a few weeks ago prevents liquidity from launching until May of 2025, independent of any patent issue that we have facing here. [00:23:54] Speaker 03: The patent issue that we're facing here is if we believe the court should affirm the district court's Rule 60 decision, if you do, then [00:24:03] Speaker 03: liquidity is still prevented from launching until May of 2025 unless and until that FDA decision is reversed by the district court of DC. [00:24:14] Speaker 03: So we believe the letter was not necessary because it doesn't change anything that you need to decide with respect to this issue. [00:24:26] Speaker 01: I thought that at one point we were asked to expedite this case potentially. [00:24:30] Speaker 01: Yes. [00:24:30] Speaker 01: Is that still? [00:24:33] Speaker 01: a current expedite as well in light of this FDA letter, or does that have no impact? [00:24:38] Speaker 01: Do you understand what I'm asking you? [00:24:39] Speaker 03: I do understand. [00:24:40] Speaker 03: I believe I understand. [00:24:43] Speaker 03: UTC had asked to expedite this issue because the injunction was then lifted based on the 793. [00:24:51] Speaker 03: At that point in time, the FDA could have granted final approval to liquidity. [00:25:00] Speaker 03: The problem was that UTC, [00:25:03] Speaker 03: before that Rule 60 issue came down, sued the FDA to prevent final approval, even though the FDA had not made a final administrative action. [00:25:15] Speaker 03: And that case was ultimately withdrawn by UTC, recognizing there was no final agency action. [00:25:20] Speaker 03: And their PI motion was denied because there was no PI administrative action. [00:25:25] Speaker 03: But because of that filing of UTC to the FDA, [00:25:31] Speaker 03: The FDA then delayed consideration of final approval of Liquidia's new drug application, or not a generic, a new drug application for eutrapia. [00:25:43] Speaker 03: The FDA was then required by the DC District Court to provide both sides and the court with three days notice before it would issue any decision. [00:25:55] Speaker 03: And the court did that in early August, said they were going to issue a decision. [00:26:00] Speaker 03: And then the FDA reversed itself. [00:26:03] Speaker 03: It had previously determined that the UTC does not get this extra exclusivity. [00:26:08] Speaker 03: It reversed itself and imposed another exclusivity. [00:26:13] Speaker 03: that prevents now the acquittal from granted. [00:26:16] Speaker 02: I hate to be a pedestrian, but all I care about is the impact of this case. [00:26:21] Speaker 02: So the bottom line, following up on Judge Cunningham's, is that even though we obviously tried to decide cases as quickly as we can, there's not an extra need in this case because [00:26:34] Speaker 02: what we do here, whether we affirm or reverse, is not going to have an immediate impact on who's on the market and who's not. [00:26:41] Speaker 02: Correct. [00:26:41] Speaker 02: And that? [00:26:42] Speaker 02: And what about in the interim with this case pending? [00:26:45] Speaker 02: Do we have to keep watching over our shoulders to see what happens? [00:26:48] Speaker 02: When do you expect stuff that might happen in the companion other case that might have an impact on what we do? [00:26:56] Speaker 03: So I can't tell you timing definitively, but as Your Honor acknowledged with counsel, [00:27:03] Speaker 03: The cert petition will be brought up to the Supreme Court this month. [00:27:08] Speaker 02: No, we know about our case. [00:27:10] Speaker 02: I was talking about the other case. [00:27:12] Speaker 03: Oh, you don't need to keep looking over your shoulder. [00:27:14] Speaker 03: If you affirm this, the way it stands now, if you affirm and May shows up, we get final FDA approval. [00:27:23] Speaker 03: If the FDA's decision gets reversed prior to that by some summary judgment motion, we get final FDA approval. [00:27:30] Speaker 04: What's the next? [00:27:31] Speaker 04: a hearing or date in the district court action. [00:27:35] Speaker 03: Which district court, Your Honor? [00:27:37] Speaker 03: There's the DC. [00:27:38] Speaker 03: The next hearing date, I believe, is December 5. [00:27:43] Speaker 03: So let me ask you this. [00:27:45] Speaker 04: The Supreme Court's going to hear this in conference. [00:27:48] Speaker 04: Let's assume they deny, sir. [00:27:50] Speaker 04: Correct. [00:27:51] Speaker 04: And the PTO promptly cancels a patent within two weeks. [00:27:57] Speaker 04: Correct. [00:27:59] Speaker 04: Why do we have to go through any of this here? [00:28:00] Speaker 03: You don't. [00:28:01] Speaker 03: It's moot. [00:28:01] Speaker 03: And we did not ask to expedite this issue. [00:28:04] Speaker 03: We actually noted and opposed in the expedition motion that because the Supreme Court could deny cert back when it was filed or now coming up in October, [00:28:13] Speaker 03: This issue is rendered moot. [00:28:15] Speaker 03: It's in our appeal brief. [00:28:16] Speaker 03: Admittedly, it's in a footnote because we're going to spend a lot of time on it. [00:28:19] Speaker 02: And there's no, I mean, in theory, in this particular case, there could be damages. [00:28:24] Speaker 02: But there's no damage. [00:28:25] Speaker 02: You're not on the market. [00:28:26] Speaker 02: We're not on the market. [00:28:27] Speaker 03: So there's nothing to go back for an assessment by the district court. [00:28:31] Speaker 03: And you took my thunder, Your Honor, but my opening line was you don't need to decide this right now. [00:28:38] Speaker 03: You can wait until at least the Supreme Court. [00:28:40] Speaker 04: Well, do you have any expectation that the PTO will promptly cancel this after assuming cert is denied after cert is denied? [00:28:49] Speaker 04: Or might they take six months, in which case this issue would be relevant, because it might run you past that May date, which you might get changed anyway. [00:28:58] Speaker 03: We believe, Your Honor, once the Supreme Court denies the petition, [00:29:04] Speaker 03: we are in contact with the Patent Office. [00:29:05] Speaker 03: And we will certainly reach out to the Patent Office, the PTAB, and say this should be canceled. [00:29:10] Speaker 03: But independent of that. [00:29:11] Speaker 04: So let me just follow up. [00:29:12] Speaker 04: December, you said the hearing in DC is in December. [00:29:16] Speaker 04: Yes. [00:29:16] Speaker 04: So we at least know that you're not getting that May date changed before December. [00:29:21] Speaker 04: Correct. [00:29:22] Speaker 04: And so we'll know early October whether the Supreme Court is going to hear it or not. [00:29:27] Speaker 04: Correct. [00:29:27] Speaker 04: So there is a two-month time between that and this December date. [00:29:33] Speaker 04: for Patent Office to cancel, which would moot this case. [00:29:37] Speaker 04: Correct. [00:29:38] Speaker 03: We believe the case is mooted. [00:29:40] Speaker 03: We believe there's no basis for this case. [00:29:42] Speaker 02: OK, I think we're going to start the clock, because this is really bad. [00:29:44] Speaker 02: We're getting into the matter tonight. [00:29:45] Speaker 02: I don't want to take more time. [00:29:46] Speaker 02: Yeah, I know. [00:29:47] Speaker 02: We're starting the clock, and we're not going to be that generous anymore. [00:29:50] Speaker 02: Not on you, but on us. [00:29:52] Speaker 02: I should have started the clock five minutes ago. [00:29:54] Speaker 02: So go ahead. [00:29:55] Speaker 03: Thank you, Your Honor. [00:29:57] Speaker 03: We believe the district court decision should be affirmed. [00:29:59] Speaker 03: The affirmance of the PTAB's 793 final written decision by this court rendered final the invalidity of the 793 patent. [00:30:09] Speaker 03: And that's language from this court's precedent in XY. [00:30:14] Speaker 02: Yeah, I know. [00:30:15] Speaker 02: You've got to acknowledge that reliance on XY and invalidity is something different. [00:30:22] Speaker 02: The consequences of the difference may be a matter of dispute. [00:30:26] Speaker 02: But this is unpatentability. [00:30:28] Speaker 02: And XY was an invalidity case. [00:30:32] Speaker 02: So that holding doesn't have as much power as some might think, including maybe Judge Andrews. [00:30:42] Speaker 02: I believe that's incorrect with respect to XY. [00:30:46] Speaker 03: What XY was, was you had a district court case, and you had a pending IPR decision. [00:30:53] Speaker 03: And the appeals were heard. [00:30:56] Speaker 03: simultaneously. [00:30:57] Speaker 02: No, I understand, but I don't want to spend 10 minutes having this debate. [00:31:04] Speaker 02: But it is different, in my view at least, not speaking with the panel. [00:31:08] Speaker 02: If you have a pending case, we do that all the time. [00:31:11] Speaker 02: We decide one issue on an IPR or on a district court, and then we issue a same opinion the same day, usually non-prec, and saying this one is governed by that one. [00:31:23] Speaker 02: kind of an internal thing that we do, I think this is different. [00:31:29] Speaker 02: Except that I think this is different. [00:31:31] Speaker 02: So what does 60B5 get you? [00:31:34] Speaker 02: What does the district court, isn't there a prudential mootness or principles of equity and the power of the district court to do this based on change circumstances? [00:31:47] Speaker 03: And we agree, Your Honor. [00:31:48] Speaker 03: And that's exactly what 60B5 says. [00:31:51] Speaker 03: If there's a change in circumstance, [00:31:53] Speaker 03: that the injunction is no longer equitable, it should be lifted. [00:31:59] Speaker 03: E+, Mendenhall, a Supreme Court precedent, and that's what we believe the court did here under two reasons. [00:32:07] Speaker 03: One, yes, the court did rely on XY. [00:32:09] Speaker 03: But second, and this is appendix page four and five, it spans pages four and five, the district court also found [00:32:16] Speaker 03: that because of this court's affirmance of the PTAB decision, the 793 patent is invalid, and therefore an injunction cannot be had on an invalid patent. [00:32:25] Speaker 03: So whether you look at the timing perspective of XY, and I respectfully disagree, and I know I won't change your opinion on that, but with respect to the inequitable issues, liquidity is now in a position to be the only party that cannot launch a product based solely on the 793 patent. [00:32:46] Speaker 03: Counsel went, I'm sorry, go ahead. [00:32:47] Speaker 01: And you know I already explored some of the opposing counsel that potential lack of equity. [00:32:53] Speaker 01: But I do agree with Judge Prost that I feel like in your briefing you were a bit fast and loose with the terminology invalidity and unpatentability, and used those terms inaccurately at times, is the way I would phrase it. [00:33:06] Speaker 01: What would you contend are the only material differences between unpatentability and invalidity that would impact this case, if at all? [00:33:16] Speaker 03: None. [00:33:17] Speaker 03: The only difference is that one's a PTAB and one's a district court. [00:33:22] Speaker 03: And one statutorily requires cancellation. [00:33:27] Speaker 03: Cancellation, as Your Honor pointed out, is a ministerial act. [00:33:31] Speaker 03: I know you disagree with that side, but to answer Judge Cunningham's questions about how we've used the language invalidity and unpatentability, I do want to address that. [00:33:39] Speaker 03: In XY, and I'll quote it, in XY, and this is page 1294 to 1295 of the XY decision, when looking at the IPR decision, this court said that affirming the IPR decision renders final a judgment on the invalidity of the asserted patents. [00:33:59] Speaker 03: Remember, in the district court case, [00:34:02] Speaker 03: The court did not affirm an invalidity of the district court case. [00:34:07] Speaker 03: It rendered final invalidity or unpatentability of an IPR decision. [00:34:11] Speaker 03: And that's why there is no distinction between the term invalidity and unpatentability for Rule 60 purposes. [00:34:19] Speaker 03: The case that UTC cites in its reply brief is in Ray's cyclobenzaprine. [00:34:25] Speaker 03: That case, they cite footnote seven, that talked about the difference between invalidity from a district court [00:34:31] Speaker 03: and patent prosecution unpatentability. [00:34:34] Speaker 03: Because in that situation, there's no issued patent yet. [00:34:38] Speaker 03: In the Inray Bingo case, again, in that case, it was a re-exam. [00:34:43] Speaker 03: And the only thing that happened in that re-exam was that the examiner confirmed a rejection of one of the attacked claims. [00:34:50] Speaker 03: That case was on appeal to the board. [00:34:53] Speaker 03: It didn't even reach to where we were here. [00:34:55] Speaker 01: And in that situation, If you would at least agree with us, though, that there's a different burden of proof with respect to unpatentability versus validity, different forms, I do agree with those bases. [00:35:04] Speaker 03: Absolutely. [00:35:05] Speaker 03: But those, I'm sorry, those differences are not meaningful here because through an IPR decision, [00:35:13] Speaker 03: You can go to the PTAB under a different burden of proof, but you still have to get it affirmed here. [00:35:19] Speaker 03: And once it's affirmed here, and that's the situation that we're talking about, we're not relying on the PTAB decision by itself. [00:35:27] Speaker 03: And Judge Andrews did not rely on the PTAB decision by itself. [00:35:31] Speaker 03: It was affirmed by this court. [00:35:33] Speaker 03: And there's not a single case that UTC sites or we can find that an injunction was maintained [00:35:40] Speaker 03: Equitable or otherwise. [00:35:42] Speaker 02: Well, it's affirmed here. [00:35:43] Speaker 02: You're not talking about just the decision, the mandate issues. [00:35:46] Speaker 02: Correct. [00:35:46] Speaker 02: That's what we key for the mandate issue. [00:35:48] Speaker 02: Yes. [00:35:48] Speaker 02: And the other side has the ability to ask for a stay of the mandate. [00:35:53] Speaker 02: And I know a stay wasn't granted. [00:35:56] Speaker 02: I don't know whether a stay was granted. [00:35:57] Speaker 02: I don't think they filed one. [00:35:57] Speaker 02: Can I go back to the mootness thing? [00:35:59] Speaker 02: Isn't this an example of it's [00:36:01] Speaker 02: But it's capable of repetition and evading review. [00:36:05] Speaker 02: I mean, wouldn't there be? [00:36:06] Speaker 02: I'm certainly going to ask your friend, because this is his appeal. [00:36:10] Speaker 02: But isn't there a basis for not mooting this case out, notwithstanding what all is going on elsewhere? [00:36:18] Speaker 03: I think it would be very rare, Your Honor, because usually in IPRs and district court case copending at the same time, the district court, if the IPR is instituted, most district courts [00:36:29] Speaker 03: in the country do stay the district court action until the IPR is filed. [00:36:33] Speaker 03: The problem that we had here is that there's a 30-month stay. [00:36:36] Speaker 03: Had Liquidia moved to stay the district court, UTC certainly would have filed a motion to extend the 30-month stay until that issue was decided. [00:36:47] Speaker 03: So I think, Your Honor, it is moot and probably can only come up in this type of situation. [00:36:55] Speaker 03: which may deal with Hatch-Waxman. [00:36:57] Speaker 03: And in our understanding, this is the first time this type of issue has come up. [00:37:04] Speaker 03: Because usually, once the decision is affirmed and the mandate issues from an IPR, no party asks to maintain an injunction. [00:37:17] Speaker 03: Because there is no patent that can be had that would equitably allow UTC to maintain their injunction. [00:37:25] Speaker 02: And your position is that cancellation doesn't matter because it's trumped by the fact that this is just a ministerial act. [00:37:34] Speaker 02: Correct. [00:37:34] Speaker 02: So it has no legal consequence. [00:37:36] Speaker 02: You didn't cite Arthrex. [00:37:37] Speaker 02: I mean, Arthrex does say it's ministerial. [00:37:39] Speaker 02: We cited, I forget the name of the case. [00:37:42] Speaker 02: I believe it was Judge Hughes. [00:37:43] Speaker 02: Yes. [00:37:43] Speaker 02: Yeah, it was a Yanku case. [00:37:45] Speaker 02: Actually, that was a little different. [00:37:46] Speaker 02: Arthvex is, I think, more apt site. [00:37:48] Speaker 03: But we do believe it is a ministerial act. [00:37:51] Speaker 03: We've cited cases here. [00:37:52] Speaker 03: We've cited cases before the district court. [00:37:54] Speaker 03: And I believe Judge Hughes mentioned this, I know asking to me, but asking to counsel as well, that if the injunction is not lifted, [00:38:07] Speaker 03: and not affirmed. [00:38:08] Speaker 03: Liquidia is at the mercy of the Patent Office, and UTC will claim that their injunction could last forever until the Patent Office administratively cancels those claims. [00:38:22] Speaker 03: That cannot be right. [00:38:23] Speaker 03: And we are at that situation right now. [00:38:25] Speaker 03: Because there is no reason why. [00:38:27] Speaker 03: And we don't know why the PTO director has not. [00:38:30] Speaker 04: Well, if that's what the statute requires, then you are at the mercy of the PTO. [00:38:35] Speaker 04: And you have other remedies, such as perhaps a mandamus petition ordering them to cancel it if they have a duty to do it and don't. [00:38:44] Speaker 03: But we don't believe the statute. [00:38:46] Speaker 03: And if you're referring to the Hatch-Waxman statute requires that. [00:38:48] Speaker 03: Because the Hatch-Waxman statute doesn't say claim cancellation. [00:38:52] Speaker 03: And Judge Andrews aptly pointed out, and counsel didn't address this, but the Hatch-Waxman statute requires a patent to be infringed. [00:39:02] Speaker 03: There is no 793 patent to be infringed. [00:39:05] Speaker 03: How do we know that? [00:39:07] Speaker 03: Counsel begrudgingly conceded upon examination that they would not assert this patent against another generic. [00:39:15] Speaker 03: They, in fact, withdrew their complaint. [00:39:18] Speaker 03: It's a completely separate action they filed against us in the 793 patent. [00:39:22] Speaker 03: They withdrew that complaint. [00:39:24] Speaker 03: If UTC believes what they stand here and say today, that the 793 patent is still valid, is still enforceable, [00:39:32] Speaker 03: still can be sued upon, then there would have been no reason why they would have dismissed their second Hatch-Waxman case against us on the 793, X, Y, or otherwise. [00:39:43] Speaker 01: Do you contend that we need to find that issue preclusion applies in order to affirm the district court? [00:39:47] Speaker 03: No, I think you can find, you can affirm based on the equities. [00:39:51] Speaker 03: We believe that the district court's issue preclusion was correct. [00:39:56] Speaker 03: all the cases that UTC cites. [00:39:59] Speaker 02: Would there have to be a different kind of analysis provided by the district court, or could we do that on our own? [00:40:06] Speaker 03: Which issue? [00:40:07] Speaker 03: On the equity issue? [00:40:08] Speaker 03: Yes. [00:40:09] Speaker 02: Your friend, I think, suggested at one point even not agreeing with that, but that a remand might be necessary. [00:40:15] Speaker 03: We disagree. [00:40:16] Speaker 03: Analysis of equity. [00:40:17] Speaker 03: We disagree because the district court's opinion addresses the invalidity of the 793 patent. [00:40:23] Speaker 03: independent of, there's two paragraphs. [00:40:27] Speaker 03: Paragraph on appendix page four, under the argument section or the analysis section, the first paragraph deals with XY initial preclusion. [00:40:35] Speaker 03: The next paragraph, which spans pages four and five of the appendix, address the invalidity. [00:40:42] Speaker 03: And under that, that's the equitable issue. [00:40:45] Speaker 03: And so we don't think there's any other [00:40:47] Speaker 03: remand for further determination or fact finding to be had, there are no other facts to be had. [00:40:55] Speaker 03: Any other questions, Your Honor? [00:40:58] Speaker 03: Thank you. [00:40:59] Speaker 03: Thank you. [00:41:12] Speaker 02: So could you just spend 30 seconds or whatever? [00:41:14] Speaker 02: Do you agree with the mootness points that were made early on in your friend's discussion that this would be moot? [00:41:20] Speaker 05: I agree with some of the concerns that you expressed, Judge Gross, not with the way in which my learned friend addressed them. [00:41:27] Speaker 04: So if the Supreme Court denies cert and the PTO cancels this patent a week later, are you not going to dismiss this appeal? [00:41:36] Speaker 05: Oh, I think at that point, with the [00:41:39] Speaker 05: with a canceled patent, I agree. [00:41:42] Speaker 05: I think that at that point, we're moot. [00:41:44] Speaker 05: Having said that, though. [00:41:44] Speaker 05: No, no, no. [00:41:44] Speaker 05: That's not the question I asked. [00:41:46] Speaker 04: The question I asked is, are you going to come in and dismiss it? [00:41:48] Speaker 05: We will dismiss the appeal. [00:41:50] Speaker 05: We would dismiss the appeal in that circumstance. [00:41:52] Speaker 05: Having said that, though. [00:41:54] Speaker 04: And like we said, we know that. [00:41:58] Speaker 04: you have another period until May of 25, and that nothing's going to happen in district court in DC until at least December. [00:42:06] Speaker 05: I'd say we have. [00:42:07] Speaker 04: So there's a big window there for. [00:42:10] Speaker 04: the Patent Office to cancel this. [00:42:13] Speaker 04: Who knows, or a big government agency, whether they're going to cancel immediately. [00:42:17] Speaker 04: I assume he's going to call whoever he knows there and say, cancel this. [00:42:21] Speaker 05: I'd imagine he'd call many people he knows there. [00:42:23] Speaker 05: But yes. [00:42:25] Speaker 05: And I think this is, however, just because something's a ministerial act doesn't mean it's de minimis. [00:42:32] Speaker 05: That has rights. [00:42:35] Speaker 04: That's the merits of your argument. [00:42:38] Speaker 02: You acknowledge there are Supreme Court cases that very much give a lot of oomph to the authority of the district court to exercise equitable discretion. [00:42:51] Speaker 02: I agree with that, Judge Prost. [00:42:53] Speaker 02: So wouldn't this fall into the same bucket as Starbucks? [00:42:57] Speaker 02: And I can't remember that other case, the Supreme Court. [00:42:59] Speaker 02: But even when the Congress said shall, it could still be trumped by a district court's discretion. [00:43:06] Speaker 02: Do you agree with that? [00:43:08] Speaker 05: I agree that there are circumstances where that's appropriate. [00:43:11] Speaker 05: I think those issues, those cases, [00:43:14] Speaker 05: didn't involve a situation where, in order to do equity, the court would have to run ramshod over the two statutes, 318B and 21 USC 355, as well as black-lettered jurisprudence from this court, namely XY and Fresenius and so forth. [00:43:32] Speaker 05: I mean, this is doing equity. [00:43:36] Speaker 05: And moreover, there is no, even if we're thinking that equity could trump the shall, which, OK. [00:43:43] Speaker 05: Judge Andrews did none of that equitable analysis. [00:43:46] Speaker 05: So at the very minimum, we ought to have a remand here to allow Judge Andrews to actually do the equitable analysis that presumably exists here. [00:43:56] Speaker 05: So I just want to address a few things that came up in my colleague's argument. [00:44:01] Speaker 05: We'll try not to take any more time than necessary. [00:44:05] Speaker 05: Packet itself went ahead at 1386 and clarified that XY was talking about unpatentability in connection with IPR decisions. [00:44:17] Speaker 05: IPR decisions under Section 318B are all about unpatentability, not about invalidity. [00:44:24] Speaker 02: And I found it telling that- [00:44:25] Speaker 02: What is the consequence of that distinction for what we're deciding here? [00:44:29] Speaker 02: Other than there's a cancellation provision in the state. [00:44:32] Speaker 05: Well, because unpatentability is absolutely different from validity for purposes of issue preclusion and for purposes of finality here. [00:44:43] Speaker 05: The district court's decision was absolutely final, and it found not invalid. [00:44:49] Speaker 05: And that's what trumps here. [00:44:51] Speaker 05: That's a sacrosanct decision by the district court. [00:44:54] Speaker 05: The E4A order was in place. [00:44:56] Speaker 05: The judgment was executed. [00:44:58] Speaker 05: And so that is final. [00:45:00] Speaker 05: And to disrupt that based upon a lower standard unpatentability finding, the issues aren't even the same here. [00:45:08] Speaker 05: This is blonder tongue. [00:45:09] Speaker 05: So I think it does matter, Your Honor, very much. [00:45:13] Speaker 02: That issue is taken care of. [00:45:15] Speaker 02: If they had issued the cancellation, it would be Trump. [00:45:17] Speaker 02: And there's no dispute about that. [00:45:18] Speaker 02: So there's nothing to be said about the different standards and substantial. [00:45:25] Speaker 02: We're all on the same page. [00:45:27] Speaker 05: I hope so. [00:45:28] Speaker 05: I thought I heard my colleagues stand here and tell this court it's moot today. [00:45:31] Speaker 05: And it is absolutely not. [00:45:34] Speaker 05: There is nothing to. [00:45:38] Speaker 05: I hope that we're all on the same page, Your Honor, with respect to the cancellation is the key here. [00:45:43] Speaker 02: No, no, no. [00:45:44] Speaker 02: Not on this respect to the cancellation, but on the extent to which the difference between unpatentability and invalidity, bottom line is your view is one requires a cancellation. [00:45:56] Speaker 02: There's nothing different substantively, organically about the fact that there are different proceedings and different standards of proof. [00:46:05] Speaker 05: Well, post-cancellation, that's where you have a collapse. [00:46:09] Speaker 05: That's where you have the exhaustion. [00:46:11] Speaker 05: Post-cancellation, yes. [00:46:13] Speaker 05: And in that case, absolutely yes. [00:46:15] Speaker 05: What I saw in the papers, though, and what I heard from my learned friend was when Judge Cunningham pressed him saying, you seem to be playing these a little fast and loose. [00:46:25] Speaker 05: He said, oh, no, no, no. [00:46:26] Speaker 05: I'm absolutely not. [00:46:27] Speaker 05: He absolutely was. [00:46:29] Speaker 05: Unpatentability and invalidity are two very different things under very different statutory regimes. [00:46:34] Speaker 05: That's my point, Judge. [00:46:39] Speaker 05: APPX 4 through 5, I would encourage the court to take a look at that. [00:46:42] Speaker 05: This is the district court's Rule 60B order. [00:46:46] Speaker 05: I think you'll find that there was absolutely no assessment of the equities here. [00:46:51] Speaker 05: It was ministerial in the sense that Judge Andrews saw invalidity and said, that's enough, and off we go to the races. [00:47:00] Speaker 05: And that's just not the right analysis. [00:47:02] Speaker 05: It's an error of law and entitled to de novo review. [00:47:06] Speaker 05: I would request that the court reverse, or at least remand, to allow Judge Andrews, if the court believes that he has the equitable authority to modify this injunction, to do the correct analysis. [00:47:20] Speaker 02: Thank you. [00:47:20] Speaker 02: Thank you all very much. [00:47:21] Speaker 02: We thank you all very much. [00:47:22] Speaker 02: And the case is submitted. [00:47:23] Speaker 02: That concludes our proceeding.