[00:00:00] Speaker 01:
Our next case for argument is 23-1389, Wuhan versus the ITC.

[00:00:10] Speaker 01:
Please proceed.

[00:00:10] Speaker 05:
Good morning, Your Honor.

[00:00:12] Speaker 05:
May it please the Court.

[00:00:15] Speaker 05:
I intend to address the infringement and economic issues in the order they were briefed, but of course, I'll go wherever Your Honors want to take me.

[00:00:26] Speaker 05:
There are two questions that the court needs to address for the infringement issues.

[00:00:31] Speaker 05:
The first one is whether the aggregate content for HealthGen, Wuhan HealthGen is the name of the party, but the party's been referring to it as HealthGen, that whether that clinical product, whether the aggregate content of that clinical product materially changes

[00:00:53] Speaker 05:
from the date it's manufactured in China to when it arrives in the United States.

[00:00:58] Speaker 05:
The second issue the court needs to address is whether reducing SDS page materially decreases, artificially decreases the aggregate content in those samples before they're actually measured.

[00:01:12] Speaker 04:
Suppose in this appeal, in the entire ITC proceeding, there never was a reducing SDS page.

[00:01:18] Speaker 04:
That data never came into the case, never even entered the picture.

[00:01:24] Speaker 04:
How would you address the presence or absence of substantial evidence based strictly on the testing in China, and then what's in the record about what happens during shipping?

[00:01:33] Speaker 05:
Well, I think in that case, we'd have a much more difficult time.

[00:01:40] Speaker 05:
Because you have an expert who says, on Ventria's side, who says, well, yes,

[00:01:46] Speaker 05:
It can increase during shipment.

[00:01:49] Speaker 05:
Yes, it can increase during storage, but it shouldn't.

[00:01:53] Speaker 05:
An expert on our side who says no, it will inevitably increase during storage and shipment.

[00:02:00] Speaker 05:
But you have their testing, their Ventria's own testing, which shows without a doubt that it actually did increase.

[00:02:08] Speaker 04:
So the expert speculation on what... It's interesting the way you're presenting that because in my mind, when I think about substantial evidence, I think I can just delete something from the record and focus on one part of the record.

[00:02:21] Speaker 04:
If that one part is substantial evidence that I'm done, I don't have to think about this other part of the record that's controversial, but it sounds like you're suggesting that I should think about the reduced thing because it actually erodes the other evidence.

[00:02:33] Speaker 05:
I'm not saying you should or can ignore that expert testimony, but that expert testimony only goes so far.

[00:02:46] Speaker 05:
theory, it ought not to make a difference unless you have some kind of event that causes aggregation to occur.

[00:02:53] Speaker 05:
But here we know aggregation actually did occur.

[00:02:56] Speaker 05:
So that expert speculation on what might occur is no longer, there needs to be some other explanation for what happened here.

[00:03:04] Speaker 05:
I mean, we are faced with their own evidence which shows unquestionably that that aggregate content increased in the nine months between when it was made in China and when it arrived in the United States.

[00:03:16] Speaker 05:
Yeah, and that is certainly an undercount, and we know it's an undercount because, again, their own expert says that the reducing SDS page tests that they use, there's a pretreatment step that's used

[00:03:32] Speaker 05:
that is designed to break apart aggregates before the measurement is made.

[00:03:38] Speaker 05:
And so their own expert at 1468 in the record, Appendix 1468, I'll quote from it.

[00:03:46] Speaker 05:
It says that when you do reduce the SDS page, you're going to have an artificially lower number or percent of aggregated albumin.

[00:03:55] Speaker 04:
Right, and so on page 49 of your brief, you've got this demonstrative probably from the hearing, right?

[00:04:01] Speaker 04:
Yep.

[00:04:01] Speaker 04:
In the middle, on the left you've got the 1.1% in China, on the right you've got the 1.81% at the border or wherever that was.

[00:04:10] Speaker 04:
In the middle, a number that you believe to be higher based on what you just said about how reducing SDS page works, but it's got question marks there.

[00:04:19] Speaker 04:
How do you know that the question marks are not under 2%?

[00:04:23] Speaker 05:
Well, so it's their burden of proving the question marks were under 2%.

[00:04:27] Speaker 05:
It is.

[00:04:28] Speaker 05:
It is.

[00:04:30] Speaker 04:
That's a great question.

[00:04:32] Speaker 04:
Tell me more about why that's their burden to go that far and prove what the question marks are.

[00:04:36] Speaker 05:
Okay, so let me take one step at a time.

[00:04:40] Speaker 05:
Well, first, the claim construction says it's got to be below 2%.

[00:04:43] Speaker 05:
So one step at a time.

[00:04:45] Speaker 05:
The Biogen case first talks about why the test in China can't be used.

[00:04:51] Speaker 05:
And so that 1.81% is useful for showing, unquestionably, that property materially changes from the time it's made in China to when it's imported.

[00:05:02] Speaker 03:
I'm sorry, I got lost when you said that there's a case called Biogen that says we can't use the 1.1 value in the China test.

[00:05:13] Speaker 05:
You can use data generated overseas as long as that data generated overseas is representative of the product in the United States.

[00:05:25] Speaker 03:
And we know from that 1.81%... What if the evidence shows that there can be some migration of that number, but it would be very minor?

[00:05:39] Speaker 03:
can we still rely on that 1.1 number?

[00:05:42] Speaker 05:
Yeah, I think you can, if it's not a material change.

[00:05:46] Speaker 03:
So we can, I think you meant biotech?

[00:05:50] Speaker 05:
Yeah, the biotech, yeah, the German name after it.

[00:05:54] Speaker 05:
And they had represented it.

[00:05:58] Speaker 05:
You can use that data as long as you show that it's representative of the product in the US.

[00:06:04] Speaker 05:
If you cannot show that, if it changes, then you can't use that data.

[00:06:07] Speaker 05:
And that's, I misspoke when I said that earlier.

[00:06:10] Speaker 03:
But, you know, there are things like, I don't know, your product brochure, I think, that says, for example, Polymer 1%.

[00:06:19] Speaker 03:
Why isn't that, you know, things like that and other communications

[00:06:24] Speaker 03:
Why doesn't that give us some comfort that there's going to be a certain level of stability and that's the expectation and that's in fact what HealthGen tells the world?

[00:06:36] Speaker 05:
It doesn't speak to the issue of encouragement.

[00:06:38] Speaker 05:
So, polymer is a type of aggregate, but the most common type of aggregate is the dimer.

[00:06:45] Speaker 05:
And so all that stability testing doesn't address the dimer percentage in the sample.

[00:06:52] Speaker 05:
And so you have all these brochures and things like that that talk about other properties that they keep trying to cram into the aggregate percentage.

[00:07:05] Speaker 05:
And it's just not, they just don't fit there.

[00:07:07] Speaker 05:
They're just not, you need to measure the aggregate percentage and the average percentage materially increased by the time it got to the United States.

[00:07:15] Speaker 01:
When you say materially increased, it didn't go above the 2%, which is the issue, and the ITC found that.

[00:07:25] Speaker 01:
The commission found, even if it increased, it was not proven that it increased above the 2%, which is the meaningful demarcation line here.

[00:07:37] Speaker 01:
It only increased

[00:07:38] Speaker 01:
to 1.81.

[00:07:39] Speaker 01:
So even if it increased, it didn't go above 2%.

[00:07:42] Speaker 01:
I don't see how I find that conclusion by the ITC to lack substantial evidence.

[00:07:47] Speaker 05:
Well, because it's based on a test.

[00:07:48] Speaker 05:
The test can show there's at least a certain amount of aggregation that occurs.

[00:07:54] Speaker 05:
But it can't show the total amount of aggregation that occurred.

[00:07:57] Speaker 05:
And this goes to your question, Judge Murphy.

[00:07:59] Speaker 05:
The second part of the argument, which is

[00:08:02] Speaker 05:
when you are left with only the reducing STS page data in the record, can the ITC rely on that to show the total amount of albumin in an unmodified sample?

[00:08:15] Speaker 05:
And you can, because their own expert, their own people agree that that test, that reducing STS page test, is not appropriate for measuring total aggregates.

[00:08:28] Speaker 05:
And I think it's,

[00:08:29] Speaker 05:
important to point out that the commercial, the products of the commercial party, the commercial products of the parties

[00:08:37] Speaker 05:
They don't use reducing SDS page to measure total aggregate.

[00:08:42] Speaker 05:
They use this HPLC test and their CEO would miss this at 1250 and the record 1251.

[00:08:48] Speaker 05:
And the reason is their own scientist testifies is the SDS page, the reducing SDS page test cannot give you information about the level of aggregation because

[00:08:59] Speaker 05:
it deliberately destroys aggregates before the test is taken.

[00:09:03] Speaker 03:
I guess the question is we don't have any hard evidence in this record as to how much, you know, breaking up of aggregation is going on for either of these reducing SDS page tests that occurred, I think in 2021, either that got the 1.81 number or got generated the 0.64 number.

[00:09:27] Speaker 03:
And so

[00:09:29] Speaker 03:
I don't know clearly different eight reducing agents were being used but I mean very well could be that the 1.81 number had very little disaggregation that occurred.

[00:09:44] Speaker 03:
Maybe the most minor de minimis amount.

[00:09:47] Speaker 05:
And so if you're left with uncertainty that's a failure proof.

[00:09:51] Speaker 03:
I know but I guess what I'm thinking about this case perhaps is that the reducing SDS page tests

[00:09:59] Speaker 03:
at most could just be corroborating evidence of what we already have with the SEC test that took place in China that got us the 1.1 number.

[00:10:09] Speaker 03:
And then, you know, a basket of other information that suggests these things are pretty stable, especially when they are shipped and stored under very specific conditions that you're

[00:10:23] Speaker 03:
you know, brochures indicate that yes, we do ship and store these things in these very kind of specific kind of conditions to ensure stability.

[00:10:32] Speaker 03:
And so at most, the reducing SDS page is just yet another test done that also ended up with something under 2.0 and therefore meaning the claimant.

[00:10:43] Speaker 05:
Except that the only thing that the reducing SDS page test can reliably show is that that aggregate content

[00:10:51] Speaker 05:
definitely increased between China and the United States.

[00:10:54] Speaker 05:
It can't be used for any other reason.

[00:10:55] Speaker 05:
It can't be used to show a minimum amount of aggregation because it destroys so many aggregates.

[00:11:02] Speaker 05:
And obviously you understand that.

[00:11:03] Speaker 05:
But the problem is the one thing you can know from that test is that test in China is no longer accurate by the time it gets to the United States.

[00:11:12] Speaker 05:
Now I'd like to, if I can, turn to the domestic industry issues.

[00:11:16] Speaker 05:
I think first we need to recognize how Venturia got to the place where it needed to argue that a product whose investments were so tiny both in absolute terms and as a percentage of their total spend

[00:11:30] Speaker 05:
on recombinant HSA products is a significant or substantial investment in practicing the patent.

[00:11:36] Speaker 04:
It's not necessarily crazy because the statute says that the ITC should protect a domestic industry that is, quote, in the process of being established.

[00:11:47] Speaker 04:
So it's not crazy that it'd be a small industry.

[00:11:49] Speaker 05:
And this is in hindsight, in their briefs, that's exactly what they're arguing, that this is a new product, that you can't expect the sales to be all that great, the investments to be all that great, because it's in the process of being created.

[00:12:00] Speaker 05:
The problem is, the ITC requires you to plead that in the complaint.

[00:12:06] Speaker 05:
They never pleaded it in the complaint.

[00:12:08] Speaker 05:
They waived it then.

[00:12:09] Speaker 05:
They never argued it at the hearing.

[00:12:11] Speaker 05:
They waived it then.

[00:12:12] Speaker 05:
And so that, I agree, that is the way they end up arguing the issue.

[00:12:17] Speaker 05:
They cannot argue that issue on appeal.

[00:12:18] Speaker 05:
They cannot sandbag us with that argument on appeal because the rules just don't allow them to do it.

[00:12:24] Speaker 04:
Does it make a difference as to what evidence would be marshaled?

[00:12:27] Speaker 05:
Yes, it makes a big difference.

[00:12:29] Speaker 05:
The whole economic theory is different.

[00:12:31] Speaker 05:
The statute provides these very specific things that you can show in order to show that a domestic industry had been established by the time they filed that complaint.

[00:12:41] Speaker 05:
And that's what they chose to go forward with because they thought they were going to have a whole stable of five products

[00:12:48] Speaker 05:
all these acres in Kansas and Colorado.

[00:12:52] Speaker 05:
The problem is they're stuck with this.

[00:12:54] Speaker 03:
You don't dispute that they've commercialized this patented product, right?

[00:13:00] Speaker 05:
I don't dispute that they've commercialized it.

[00:13:02] Speaker 03:
They've been in the marketplace since, what, 2018?

[00:13:07] Speaker 03:
And all the engineering happening in the United States

[00:13:12] Speaker 03:
all the manufacture happening in the United States, all the marketing is happening in the United States.

[00:13:18] Speaker 03:
I mean, I guess what I'm wondering is what more do you want from Ventria to do in the United States when they are doing everything in the United States and have a

[00:13:33] Speaker 05:
actively commercialized product

[00:13:52] Speaker 05:
or substantial.

[00:13:54] Speaker 05:
So this is where, just the fact that they're in the United States, that's not enough.

[00:14:01] Speaker 05:
There needs to be something more.

[00:14:02] Speaker 05:
So what the ITC grasps at to show something more is this investment to revenue ratio.

[00:14:11] Speaker 05:
Which, whatever relevance that could have in another context, like for example, with the small sales, it's a beginning product, it's in the process of being created.

[00:14:22] Speaker 05:
Yes, then maybe you can say like these tiny sales in contrast with the investments or whatever.

[00:14:29] Speaker 05:
The problem is the way it was done here.

[00:14:31] Speaker 05:
It was just unthinkingly assigned, like, okay, investments to ratio, we did it in other cases, investments to revenue.

[00:14:38] Speaker 01:
Okay, Council, but I have a question.

[00:14:40] Speaker 01:
Significant or substantial as compared to what, if it is the entire industry, if, I'm just gonna call it OPTI because I like to shorten names of things, but if we're gonna call it OPTI as opposed to all RHSA products,

[00:14:56] Speaker 01:
you know, if the market is OPC, then this is the substantial and significant portion of that market.

[00:15:03] Speaker 01:
It may not be a substantial or significant part of all RHSA products, but it is a substantial and significant part of the OPC market.

[00:15:13] Speaker 05:
Correct?

[00:15:14] Speaker 05:
You can't just reduce the market to a single product and maybe need an attempt to show the market.

[00:15:19] Speaker 01:
But you can, because in the ITC, unless I'm mistaken, you can

[00:15:23] Speaker 01:
only pursue this when things covered by the claims.

[00:15:27] Speaker 01:
And it's clear, everyone agrees, the claims cover Opti.

[00:15:30] Speaker 01:
It's also clear that they don't cover all RHSA products.

[00:15:36] Speaker 01:
So why can't the ITC look at the claims, ascertain what market would be within the scope of those claims,

[00:15:44] Speaker 01:
and then determine whether the market was in the scope of those claims, which in this case is only Opti, is definitely not all RHSA products, is a substantial and significant market.

[00:15:55] Speaker 01:
Why can't they do that?

[00:15:56] Speaker 01:
That's what they did here that feels right to me.

[00:15:59] Speaker 01:
What's wrong with that?

[00:16:00] Speaker 05:
I don't think that's what they did here.

[00:16:02] Speaker 05:
They didn't look at the market for Opti.

[00:16:04] Speaker 01:
Am I wrong?

[00:16:05] Speaker 01:
Am I wrong in anything?

[00:16:06] Speaker 01:
Okay, forget about what they did.

[00:16:07] Speaker 01:
Am I wrong in anything I said?

[00:16:09] Speaker 01:
Isn't it correct that not all of the RHSA products would fall within the claims?

[00:16:14] Speaker 05:
That is correct, right.

[00:16:15] Speaker 01:
Isn't it also correct that the Opti does?

[00:16:19] Speaker 05:
Yes, yeah, we don't dispute that it falls in the claims.

[00:16:22] Speaker 05:
The problem is, this is not the theory they pursue below.

[00:16:25] Speaker 01:
But isn't it also the case that the ITC is only supposed to look at the things that fall within the scope of the claims?

[00:16:32] Speaker 05:
I don't think that's true.

[00:16:35] Speaker 05:
It's a pretty holistic analysis, and that's something that they can look at.

[00:16:40] Speaker 05:
It's part of what they can look at.

[00:16:42] Speaker 05:
But they need to look at the investments.

[00:16:44] Speaker 05:
The investments are the most important part.

[00:16:45] Speaker 05:
That's what the statute talks about.

[00:16:47] Speaker 01:
But the investments in the market for what's covered by the claim.

[00:16:50] Speaker 01:
I mean, that's what this is all about.

[00:16:52] Speaker 01:
It's all about excluding products covered by the claim.

[00:16:55] Speaker 05:
I don't know that that's correct.

[00:16:58] Speaker 05:
I don't know that the market is defined by the patent.

[00:17:01] Speaker 05:
I'm not familiar with cases that hold for that.

[00:17:03] Speaker 01:
Show me what proof you have that that's not correct.

[00:17:05] Speaker 01:
Is there a statutory site?

[00:17:07] Speaker 01:
Is there something in the rules?

[00:17:08] Speaker 01:
Is there case law?

[00:17:10] Speaker 01:
an ITC lawyer, right?

[00:17:11] Speaker 01:
You are telling me that you think that my understanding of what the ITC is supposed to do, i.e.

[00:17:16] Speaker 01:
focus on a market that is covered by the claims, is wrong.

[00:17:20] Speaker 01:
So I would think that there would be some

[00:17:23] Speaker 01:
something out there.

[00:17:24] Speaker 01:
Show me if that's wrong.

[00:17:26] Speaker 05:
Well, I'm out of time, but let me just address the issue.

[00:17:29] Speaker 05:
You're way out of time.

[00:17:31] Speaker 05:
The statute says you look at investments, you look at whether they're substantial or significant, and there's nothing in there about percentage of the market or size of the market.

[00:17:39] Speaker 01:
Is there anything in there about it being focused on what's covered by the claim in that statute?

[00:17:42] Speaker 01:
Anything?

[00:17:43] Speaker 05:
That it's claimed?

[00:17:46] Speaker 01:
Okay, how about you take a look and I'm going to restore some of your rebuttal time and maybe you can answer that question on rebuttal.

[00:17:52] Speaker 03:
I just have one last question.

[00:17:54] Speaker 03:
I'm sorry.

[00:17:56] Speaker 03:
So how would you change the facts to satisfy you that there's a domestic industry here?

[00:18:03] Speaker 03:
I mean, what would it take?

[00:18:04] Speaker 03:
You're not satisfied with their investment numbers right now, but what would it take?

[00:18:09] Speaker 03:
What's your number?

[00:18:11] Speaker 03:
What's your favorite number that makes you feel comfortable that the investments in labor, capital, plants, R&D is finally significant enough?

[00:18:22] Speaker 05:
So, I think it would be very difficult to prove that here with this product.

[00:18:28] Speaker 03:
I think the way to go is to make your numbers are what you would think is impressive enough.

[00:18:35] Speaker 05:
Well, I mean, they have to invent the numbers, but the approach they could have taken, I think an approach that you could take with this new product just getting on the market with very little track record of sales, is in the process of being generated, in the process of being created.

[00:18:48] Speaker 05:
That's, in hindsight, that's the way, and it's the way they breathe it on appeal, but that's not what they argued below and it's been raised.

[00:18:55] Speaker 01:
Okay, so my clerk looked it up for you, because I don't want you to waste your time during it, and she says that the statute says that the industry is, quote, related to the articles protected by the patent.

[00:19:06] Speaker 01:
So it's not just things covered by the patent, so it's not just OPTI, but it's to products related to the articles protected by the patent.

[00:19:14] Speaker 01:
Did you make arguments that all our HSA products are related to

[00:19:19] Speaker 01:
the products covered by the patent here?

[00:19:21] Speaker 05:
Yeah, both partners did.

[00:19:23] Speaker 05:
Their whole DI case was based on all of their recombinant HSA products.

[00:19:28] Speaker 01:
So the statute says that the ITC can look at, for domestic industry, products related to.

[00:19:34] Speaker 01:
Is there any finding here or any determination in whether all RHSA products are in fact related to?

[00:19:45] Speaker 05:
The ALJ certainly made that finding.

[00:19:48] Speaker 05:
I don't think the ITC said anything like that.

[00:19:52] Speaker 05:
The commission didn't weigh in on this issue.

[00:19:55] Speaker 01:
I'm just asking because on appeal you're arguing that Opti was too small of a market.

[00:19:59] Speaker 01:
It wasn't right for them to limit the domestic industry market to Opti, right?

[00:20:03] Speaker 05:
Isn't that your argument?

[00:20:06] Speaker 05:
The investments are tiny.

[00:20:08] Speaker 05:
The market, nobody ever looked at the market for Opti because it was never raised below.

[00:20:14] Speaker 01:
If it's all, you can't say they're tiny.

[00:20:16] Speaker 01:
If this is the correct market, if the correct market is Opti, and it includes all of the investments in Opti, then I don't know that it matters that it's a small numbers problem if it's 100% of the market.

[00:20:26] Speaker 05:
Your Honor, you're making an argument for them that they never made below.

[00:20:29] Speaker 05:
No one ever talked about the market for Opti in this case.

[00:20:34] Speaker 05:
I feel like I'm way beyond, but I don't, the market for Opti, you just injected something into this case that nobody's ever talked about.

[00:20:44] Speaker 01:
Isn't that what the ITC found?

[00:20:46] Speaker 05:
No.

[00:20:46] Speaker 01:
What did the ITC find?

[00:20:47] Speaker 05:
The ITC, it found, well first most of the analysis, mostly ALJ's analysis,

[00:20:53] Speaker 05:
is based on the products, the fixed products that they talked about, and the investment for all fixed products is significant, and then those.

[00:21:03] Speaker 01:
I mean, all the arguments on appeal are, I mean, all the arguments on appeal are 100% of Opti investments are domestic.

[00:21:09] Speaker 01:
100% of the value added to Opti is domestic operations.

[00:21:12] Speaker 01:
Opti's investments are significant and substantial when compared to the revenue derived there from.

[00:21:16] Speaker 01:
All of the arguments on appeal that seem to me are focusing on the domestic industry being

[00:21:23] Speaker 01:
focused on just Opti.

[00:21:26] Speaker 01:
Am I missing something?

[00:21:27] Speaker 05:
So it was never argued like that below.

[00:21:30] Speaker 05:
The ALJ, the ALJ's primary finding was all six of these products satisfy the domestic industry prong.

[00:21:38] Speaker 05:
And then there was, but even if only one of them does, I still find them significant.

[00:21:42] Speaker 05:
And that analysis is really brief.

[00:21:44] Speaker 05:
That analysis has nothing to do with what you just talked about.

[00:21:48] Speaker 05:
The analysis says 100% of the investment.

[00:21:50] Speaker 01:
Okay, so my part, I'm going to help you out again.

[00:21:51] Speaker 01:
My clerk, who is super smart, says the ALJ found that even if the domestic market was just Opti and not all six RHSA products, there would still be a domestic industry and the ITC actually affirmed that exact finding.

[00:22:05] Speaker 01:
So what?

[00:22:07] Speaker 01:
I don't get it.

[00:22:08] Speaker 05:
Because when you look at the investments, the raw numbers that this court said, you need to find, you need to look at the quantitative value of the investments first.

[00:22:18] Speaker 05:
And those numbers are so small.

[00:22:20] Speaker 05:
And then the investment, the only thing beyond those numbers is the investment to revenue ratio, which in this context just had no real meaning.

[00:22:30] Speaker 01:
All right, well let's hear from opposing counsel and I'll give you a little bit of rebuttal time.

[00:22:34] Speaker 04:
And double check the gray brief because it seems like your arguments are really out of sync with what's in your gray brief.

[00:22:43] Speaker 02:
Thank you, Your Honor.

[00:22:44] Speaker 02:
Okay, which one do you represent?

[00:22:45] Speaker 02:
I represent the Commission.

[00:22:47] Speaker 02:
Okay, you're the ITC person.

[00:22:48] Speaker 01:
Okay, go ahead.

[00:22:51] Speaker 02:
So, just want to clarify something to begin with.

[00:22:54] Speaker 02:
I'm going to start with domestic industry, but

[00:22:57] Speaker 02:
The Opti product, that is a clinical grade product and it is ventreous only clinical grade product and it competes with health gen clinical grade product.

[00:23:08] Speaker 02:
So there's two products that are in the same market and they're the only two products in that market.

[00:23:15] Speaker 01:
And they both are Opti.

[00:23:16] Speaker 01:
They're not other RHSA?

[00:23:19] Speaker 02:
Yeah.

[00:23:20] Speaker 02:
So they're rice derived recombinant human serum albumin products and they have

[00:23:26] Speaker 02:
lower aggregated albumin amount.

[00:23:28] Speaker 01:
Under 2%.

[00:23:29] Speaker 02:
It's way under 2%.

[00:23:31] Speaker 01:
We'll get to the infringement piece.

[00:23:32] Speaker 02:
We'll get to that.

[00:23:33] Speaker 02:
But they're the high quality stuff.

[00:23:36] Speaker 02:
They have less for both sides.

[00:23:40] Speaker 01:
Well then help me understand this domestic industry thing because I might be mixed up.

[00:23:46] Speaker 01:
These are small numbers in the scheme of the kinds of numbers we normally see.

[00:23:50] Speaker 01:
I know they're confidential so we won't get into the actual numbers themselves.

[00:23:56] Speaker 01:
How do we assess, how does the ITC assess what is substantial or significant, which is what you're required to do in assessing domestic industry?

[00:24:06] Speaker 03:
Especially when LELO, our president, says you need to do a quantitative analysis to determine domestic industry, the economic form.

[00:24:17] Speaker 02:
Okay, so yeah, so there's two questions here.

[00:24:20] Speaker 01:
Start with mine, because I'm the chief.

[00:24:23] Speaker 01:
It's the same question.

[00:24:25] Speaker 01:
Go ahead.

[00:24:26] Speaker 02:
So it's contextual.

[00:24:29] Speaker 02:
You have these numbers, but there's not just like a number that you can say this is big enough or this is small enough.

[00:24:38] Speaker 02:
And I think you're getting on to something.

[00:24:39] Speaker 02:
This is a niche industry, but this represents the entire industry.

[00:24:45] Speaker 02:
This is in the United States.

[00:24:46] Speaker 02:
HealthGen has no domestic operations.

[00:24:51] Speaker 02:
Ventria is the only domestic producer of Opti.

[00:24:56] Speaker 02:
This is the entire market.

[00:24:57] Speaker 01:
It is... Okay, so now you're touching upon that argument that I was discussing with opposing counsel about how does the ITC define what the market is, right?

[00:25:09] Speaker 01:
You saw I was pushing for the market is you all divide it, I thought, as Opti.

[00:25:15] Speaker 02:
expert, we agree with you.

[00:25:17] Speaker 01:
Okay, and I think if I'm not mistaken, his suggestion was it shouldn't be limited to op-e, it should be all our HSA products.

[00:25:27] Speaker 01:
Is that your understanding?

[00:25:29] Speaker 02:
No, it sounds like... We agree with you in your clerk.

[00:25:36] Speaker 02:
It's related to the articles protected by the patent, and it also says domestic condition is with respect to the articles protected by the patent.

[00:25:44] Speaker 03:
So that is up here, that is OPTI in that, it's only OPTI, just to be able to... Yeah, just formatted by how we've converted this case into something called OPTI.

[00:26:00] Speaker 02:
uh... they appear to be a couple of uh... suggested that this way of approaching domestic industry was never raised at the i t c what's your response to that you know what we look at it is very clear in our analysis of this this is an industry one hundred percent of the investments in opting are domestic zero percent is for foreign one hundred percent of the value added is domestic in zero is foreign that was

[00:26:29] Speaker 02:
This is analysis that Lilo explicitly approved and friends on the other side don't respond to our argument that these are analyses that Lilo approved comparing the foreign to domestic investments and the foreign to domestic value added and that's very qualitative.

[00:26:49] Speaker 02:
It's not qualitative because all can be rephrased as 100%.

[00:26:58] Speaker 02:
This industry is big, as big as it can possibly be.

[00:27:01] Speaker 01:
So I think if, Emma, I'm understanding it, your point is that we should understand Lilo.

[00:27:06] Speaker 01:
And it's pushed towards qualitative analysis as including percentage of market, not just raw dollar value.

[00:27:12] Speaker 01:
That its assessment of qualitative was not limited to how much money is at stake, but could also be viewed through the lens of what percentage of the market this represents.

[00:27:22] Speaker 02:
Exactly.

[00:27:22] Speaker 02:
Yeah, that's how we read LELO.

[00:27:24] Speaker 02:
That's how we apply LELO.

[00:27:26] Speaker 03:
Let me make sure I got the same understanding as LELO.

[00:27:29] Speaker 03:
LELO demands a quantitative analysis, right?

[00:27:33] Speaker 03:
right okay and then uh... then the next question is how do you go about doing a quantitative analysis do you just look at the raw value number of investment dollars saying R&D or not and you're saying no it's got to be contextual analysis then the next question is how in the world do you go about doing that so obviously what has happened here is that the ITC has said okay we're going to look at

[00:27:59] Speaker 03:
the amount of domestic commercial activity against the amount of non-domestic commercial activity that has taken place to create and sell this product.

[00:28:14] Speaker 03:
And it turns out that nothing's happened abroad.

[00:28:17] Speaker 03:
Everything has happened here in the U.S.

[00:28:20] Speaker 03:
The low number of dollars, relatively low number of dollars it took to engineer this thing and do the labor to create this thing

[00:28:30] Speaker 03:
alone doesn't render this thing a non-domestic industry.

[00:28:35] Speaker 03:
And I guess my question to you is, is that enough?

[00:28:38] Speaker 03:
Is it enough that everything is domestically sourced, even if the numbers are tiny?

[00:28:44] Speaker 03:
What if there was no additional labor costs?

[00:28:47] Speaker 03:
What if there was no plant or equipment needed beyond the already existing plant and equipment a company had?

[00:28:53] Speaker 03:
And the R&D could be fairly characterized as taking no more than $1,000 to create this new product that they then patented.

[00:29:03] Speaker 03:
I mean, it was all just the incredible insight to invent something, but in the end, the amount of actual raw dollar investments are as tiny as $1,000.

[00:29:13] Speaker 03:
But nothing happened internationally.

[00:29:15] Speaker 03:
It all happened here in the USA.

[00:29:17] Speaker 03:
Is that enough to create a domestic industry with nothing more?

[00:29:20] Speaker 03:
Could the analysis be cut off just right there?

[00:29:24] Speaker 02:
I think yes, if you're commercializing products and you're actually producing something and you're bringing it to market, in the context of things, it would be like punishing efficiency.

[00:29:35] Speaker 02:
You have a very, very efficiently operated industry that doesn't use a lot of dollars but is providing a lot of products that people need and are serving very important purposes.

[00:29:48] Speaker 02:
We apply realities in the marketplace analysis.

[00:29:53] Speaker 03:
How do we know that's what the terms significant and substantial are getting at in 337?

[00:30:00] Speaker 03:
That it's, in your view, this pure, let's just look at what's happening domestically in a financial way versus what's going on non-domestically in a financial way to create this product.

[00:30:14] Speaker 02:
So we're looking at protecting domestic industries and if we think that Von Clem decided this case or this issue a long time ago when they said that, the court said that it doesn't protect only large industries.

[00:30:29] Speaker 02:
it protects industries of all sizes.

[00:30:33] Speaker 02:
And I'll also point out.

[00:30:34] Speaker 03:
It said something more like there's no dollar value requirement to establish the domestic industry or something like that.

[00:30:41] Speaker 02:
I remember it differently, saying there's no minimum size to the entire industry.

[00:30:47] Speaker 01:
Can you pivot?

[00:30:48] Speaker 01:
I mean, you're almost out of time, but we let him go way over, so I'm going to give you a little more time.

[00:30:51] Speaker 01:
But I'd really like to hear your arguments on the infringement question, if you don't mind.

[00:30:54] Speaker 01:
Is that OK?

[00:30:55] Speaker 01:
Do you have anything else?

[00:30:56] Speaker 02:
OK.

[00:30:56] Speaker 02:
Thank you, Your Honor.

[00:30:57] Speaker 02:
I appreciate that.

[00:31:00] Speaker 02:
So all of the testing data shows infringing amounts of aggregates.

[00:31:07] Speaker 02:
And substantial evidence, of course, commissions reliance on this data.

[00:31:10] Speaker 03:
The 1.81% number makes me nervous.

[00:31:13] Speaker 03:
I mean, that's a big move from 1.1 in a period of less than one year, maybe eight months.

[00:31:21] Speaker 03:
And that's with a reducing SDS page, where you're adding the surfactant, you're adding the reducing agent, and you're getting something that's getting really close to 2.0.

[00:31:31] Speaker 03:
How should I think about that number?

[00:31:33] Speaker 02:
So I think you should look at it in context with a test that was done just a month before that showed 0.64%.

[00:31:40] Speaker 03:
And if you look at those two- Maybe that's just a, they had a heavy duty reducing agent in there that really broke things up.

[00:31:48] Speaker 03:
Okay, that's fine, but we still have the reality of a 1.81 number clearing us in the face.

[00:31:57] Speaker 03:
that I think you would agree would necessarily be a lower number than if HEC HPLC were used as the test.

[00:32:05] Speaker 02:
So I think what's getting overlooked is the reducing effect only happens if there are these very particular types of aggregates.

[00:32:15] Speaker 02:
They are disqualified, linked, covalent aggregates.

[00:32:20] Speaker 02:
And HealthGen's argument is that if their sample has these type of aggregates, then reducing agent

[00:32:28] Speaker 02:
would undercount them.

[00:32:29] Speaker 02:
And we don't disagree that there would be some undercounting if there are those aggregates, but we don't think that there is any evidence showing that they have those aggregates.

[00:32:37] Speaker 02:
There are other products.

[00:32:38] Speaker 02:
There are medium-grade products.

[00:32:40] Speaker 02:
They ran a test using a reducing agent.

[00:32:42] Speaker 03:
Then what about the 0.64 number?

[00:32:45] Speaker 03:
Doesn't that evidence something?

[00:32:46] Speaker 02:
There's variability in these measurements.

[00:32:51] Speaker 02:
Dr. Wilkin testified that there's some degree of variability that's expected for these measurements.

[00:32:57] Speaker 04:
And there's no same batch to same batch comparisons.

[00:33:00] Speaker 04:
We're dealing with different batches, right?

[00:33:03] Speaker 04:
For the... Is any of this data where you have data in China and data domestically the same batch?

[00:33:10] Speaker 02:
The three main tests that were lying on the COA from September and then the April and the... Sorry, the May and the June reducing tests, those are all the same batch.

[00:33:20] Speaker 02:
Same batch.

[00:33:21] Speaker 02:
Same line.

[00:33:21] Speaker 04:
Okay.

[00:33:22] Speaker 04:
Well, so would you concede that Appellant's basic logic

[00:33:26] Speaker 04:
is correct.

[00:33:28] Speaker 04:
I was referring to the demonstrative with the question marks in the middle.

[00:33:31] Speaker 04:
The basic logic that that question mark number must have been higher than 1.81%.

[00:33:37] Speaker 04:
We just don't know how much.

[00:33:38] Speaker 04:
Would you agree with the basic logic?

[00:33:41] Speaker 02:
I don't think they've shown that there's any disqualified covalent.

[00:33:45] Speaker 02:
aggregates in there.

[00:33:46] Speaker 02:
If there are, then I would agree with you.

[00:33:48] Speaker 04:
Okay.

[00:33:49] Speaker 04:
Well, let's just assume that their logic is correct.

[00:33:52] Speaker 04:
The response that I got from them was, okay, now the burden is on the patent owner to show that it's, that that quote, those question marks were not over 2%.

[00:34:03] Speaker 04:
How do you respond to the burden issue?

[00:34:08] Speaker 02:
Are you asking about whether it was Ventria's burden to show that it's more likely to not

[00:34:14] Speaker 02:
their argument challenging reliability.

[00:34:17] Speaker 04:
Appellants saying all they had to do was point to these question marks and say, hey, you don't know what those numbers are.

[00:34:22] Speaker 04:
Could have been over 2%.

[00:34:23] Speaker 04:
There's a rational reason to think they were over 2%.

[00:34:26] Speaker 04:
That's a failure of proof.

[00:34:29] Speaker 02:
We think that Ventria satisfied their prima facie case representing this testing evidence.

[00:34:34] Speaker 02:
And if we're going to discount it, it needs to be a good reason why.

[00:34:39] Speaker 02:
But even if that's not the proper standard of evidence, even if that's not the proper standard, the evidence is very strong that

[00:34:45] Speaker 02:
this testing is reliable.

[00:34:47] Speaker 02:
The evidence related to HealthGen's touting of the stability that's still in the play here, they say these are very stable products.

[00:34:56] Speaker 02:
It just contradicts the point saying, well, it went to 1.8 within a year.

[00:35:01] Speaker 02:
They're saying it went well beyond 1.8.

[00:35:03] Speaker 02:
They're saying it's two to three times higher than that.

[00:35:05] Speaker 02:
That's almost 7%.

[00:35:07] Speaker 01:
Can I ask another question?

[00:35:08] Speaker 01:
I'm not sure where it is, but I think that the ITC held this.

[00:35:14] Speaker 01:
found it, I should say.

[00:35:17] Speaker 01:
I remember there being, and my clerk's looking for it now, but I remember there being differences in the conditions under which these two sets of tests were run.

[00:35:26] Speaker 01:
I have in my brain the number five.

[00:35:27] Speaker 01:
I don't know if that's right.

[00:35:28] Speaker 01:
Okay.

[00:35:30] Speaker 01:
I have her looking for where it is and I don't remember.

[00:35:32] Speaker 01:
Did the ITC find, and I thought they had, but I don't know.

[00:35:36] Speaker 02:
We did, yeah.

[00:35:37] Speaker 02:
That is one rationale for just evaluating these results and just not being concerned.

[00:35:44] Speaker 01:
And so we're reviewing this for substantial evidence.

[00:35:48] Speaker 01:
So regardless of those question marks on his demonstrative, the ITC made a fact finding that it is possible that the differences between these numbers, did they find that it was a result of those five?

[00:36:01] Speaker 01:
It's possible?

[00:36:02] Speaker 01:
What did they find, precisely?

[00:36:04] Speaker 01:
Because different conditions under each of these.

[00:36:05] Speaker 02:
The fact that it's not very concerning that these numbers are different.

[00:36:08] Speaker 02:
We looked at the data overall.

[00:36:10] Speaker 02:
You have September, the first one.

[00:36:14] Speaker 02:
May 1, that's .64, and then you have later when that's May 1.

[00:36:17] Speaker 02:
It's all, it all seems pretty consistent.

[00:36:20] Speaker 02:
It's more, found that overall it's more likely that infringing products were imported into the United States.

[00:36:27] Speaker 01:
Because they're all under 2%.

[00:36:28] Speaker 02:
They're all under 2%, yes.

[00:36:30] Speaker 01:
Okay.

[00:36:31] Speaker 01:
Okay.

[00:36:31] Speaker 01:
Anything further?

[00:36:33] Speaker 01:
Okay.

[00:36:33] Speaker 01:
Let's give the other defendants or appellee a chance.

[00:36:42] Speaker 00:
Thank you, and may it please the court.

[00:36:44] Speaker 00:
My name is Tom Hennigan, and I represent the Intervenor Ventury of Bioscience.

[00:36:50] Speaker 00:
Venturee is a pioneering American bio... Okay, stop.

[00:36:52] Speaker 00:
We've been here a long time.

[00:36:54] Speaker 01:
Everybody's exceeded their time already by a lot.

[00:36:57] Speaker 01:
If you have something new that isn't puffery just to endear yourself to your client, then focus on that, but I do not want to hear any regurgitation of the exact issues and arguments that have already been raised.

[00:37:07] Speaker 00:
Understood.

[00:37:07] Speaker 00:
Let me start with the use of the phrase Opti, because I think that maybe could be a little confusing.

[00:37:12] Speaker 00:
Optibuman is actually the brand name of the Venture product.

[00:37:15] Speaker 00:
So I think maybe an easier way to think of it is

[00:37:18] Speaker 00:
The market is the clinical-grade RHSA.

[00:37:21] Speaker 01:
Hey, sir.

[00:37:21] Speaker 01:
Opti is a really cute name.

[00:37:23] Speaker 01:
Don't be dissing my little... Oh, not at all.

[00:37:26] Speaker 00:
I don't mean it as a diss.

[00:37:28] Speaker 00:
I get it.

[00:37:28] Speaker 00:
No, thank you.

[00:37:29] Speaker 01:
The technical clarification is welcome.

[00:37:31] Speaker 00:
And in this market for clinical-grade RHSA, there's only two products.

[00:37:35] Speaker 00:
There's Ventures' product, and there's Ruhann Health Gen's product.

[00:37:38] Speaker 00:
So that is the entire market for this commercialized product.

[00:37:41] Speaker 00:
And I think that's an important distinction, that they are the only two, which is why we focused on that.

[00:37:49] Speaker 04:
Can I ask a question for you on the infringement side?

[00:37:53] Speaker 04:
Yes.

[00:37:54] Speaker 04:
There's a suggestion under the biotech case that the data from China combined with the expert testimony about shipping conditions, that alone can't carry the day.

[00:38:05] Speaker 04:
That can't be substantial evidence for infringement.

[00:38:08] Speaker 04:
How do you respond to that?

[00:38:09] Speaker 04:
Forget about the domestic testing.

[00:38:12] Speaker 00:
OK.

[00:38:13] Speaker 00:
What I would say about that is that the

[00:38:16] Speaker 00:
Calling the shipping information evidence is a little bit of a stretch.

[00:38:20] Speaker 00:
The idea that somehow

[00:38:21] Speaker 00:
the aggregation is increased in shipping, was really just lawyer argument.

[00:38:26] Speaker 00:
And it wasn't proven that that could happen.

[00:38:30] Speaker 00:
Certainly Wuhan Health Gym had the opportunity to test that same batch that they tested in China and found it.

[00:38:36] Speaker 04:
I understand, but what they're arguing is under the biotech case, it's not sufficient to rely on evidence of the testing overseas

[00:38:47] Speaker 04:
you have to have direct evidence that the crossing the border domestically.

[00:38:53] Speaker 04:
Do you disagree with that?

[00:38:54] Speaker 00:
I do disagree with that because I think what the case says is that if you have contrary evidence then you can't rely on the foreign testing.

[00:39:00] Speaker 00:
And here what we have is we have the foreign testing that shows infringement.

[00:39:03] Speaker 00:
Then we have the shipping to the US, where it's in Wuhan Health Gen's possession for a period of months before it's then turned over to Ventria for further testing.

[00:39:12] Speaker 00:
And then there's just this theory that it must have gotten shaken up on the flight over.

[00:39:16] Speaker 00:
But there's no evidence of that.

[00:39:17] Speaker 00:
There's no testing that shows.

[00:39:19] Speaker 00:
The reducing number is higher than the number was in China.

[00:39:22] Speaker 00:
It is a bit higher, but it's still within the frame of the evidence.

[00:39:25] Speaker 03:
But it is evidence that there is aggregation that happened at this time.

[00:39:29] Speaker 03:
Yes, but the question is how much.

[00:39:31] Speaker 03:
But it's still... I think you would agree that the amount of aggregation increased on the order of 70-80% when it went from 1.1 to 1.81 and that 1.81 is with reducing SDSK.

[00:39:45] Speaker 03:
But reducing SDSK... So I just want to make sure we're all in the same place.

[00:39:48] Speaker 03:
You agree that this particular batch that was tested three different times

[00:39:52] Speaker 03:
the aggregation definitely increased on the order of at least 70-75% from 1.1 to 1.81.

[00:39:59] Speaker 00:
It did, but still within the element of the claim.

[00:40:02] Speaker 00:
So it's still entrenched, even though it increased slightly.

[00:40:05] Speaker 03:
It's not slightly to me.

[00:40:08] Speaker 03:
I mean, when you go from 1.1 to 1.81, I mean, percentage-wise, that's a pretty incredible amount of change to the amount

[00:40:18] Speaker 03:
aggregation going on for this argument.

[00:40:21] Speaker 00:
But it comes down to the question of, does the product infringe when it's in the United States?

[00:40:27] Speaker 00:
And it does.

[00:40:27] Speaker 00:
It's still within the claim element of less than 2% aggregated argument.

[00:40:32] Speaker 00:
And there's no evidence that reducing SDS page had any impact on that aggregation.

[00:40:38] Speaker 00:
And so what we know is that it infringed when it left China.

[00:40:41] Speaker 00:
It infringed after it was here.

[00:40:43] Speaker 00:
And it continues to infringe.

[00:40:44] Speaker 03:
This particular batch, when did it arrive in the United States?

[00:40:48] Speaker 00:
I'm not sure the exact date.

[00:40:49] Speaker 00:
It arrived in the United States, I don't know.

[00:40:53] Speaker 00:
I don't speculate, Judge.

[00:40:54] Speaker 00:
I don't know the exact date of when it arrived.

[00:40:56] Speaker 00:
But shortly after, it was tested and manufactured.

[00:40:59] Speaker 03:
How do you understand what quantitative analysis means for the purposes of the economic problem?

[00:41:05] Speaker 00:
I think that there are a couple elements of it that apply in this case.

[00:41:10] Speaker 00:
One, I think, as you pointed out, this idea of how much activity happened in the U.S., how much activity happened elsewhere.

[00:41:16] Speaker 00:
In this case, it happens to be 100 percent.

[00:41:18] Speaker 00:
And I think when you couple that then with an actually commercialized product that was brought to market, I think that is a successful quantitative analysis to show a domestic industry, that this American company invested however much they invested, however much it took.

[00:41:34] Speaker 00:
And I think it's also important to point out that one of the reasons this number is what it is is because it was a sales-based allocation as opposed to an actual allocation of the investment because Ventry did not separate the amount of money they spent in developing all their products.

[00:41:50] Speaker 00:
So they can't say, we spent exactly X millions developing just Octobume.

[00:41:55] Speaker 00:
They can only talk about what they spent developing all their products because the accounting didn't work that way.

[00:42:02] Speaker 03:
In certain stringed instruments, the ITC opinions, was that product there ever commercialized?

[00:42:09] Speaker 00:
My understanding was not.

[00:42:10] Speaker 00:
There was several different prototypes over many, many years that were never brought to market.

[00:42:15] Speaker 00:
And I think that's a distinction for the stringed instruments case, is that that was never a commercialized product.

[00:42:21] Speaker 03:
I don't understand the investments to revenue ratio.

[00:42:25] Speaker 03:
It feels very random to me.

[00:42:27] Speaker 03:
Could you explain why that ratio, that

[00:42:32] Speaker 03:
the commission used is in fact relevant to how to understand whether investments here in R&D or labor or capital was, supports the idea of a substantial investment because right now I don't get it at all.

[00:42:47] Speaker 03:
It's just random.

[00:42:48] Speaker 00:
Well, I think the problem with that ratio is that it's impossible to determine exactly what the investment was in Opium because that was not money to extract.

[00:42:57] Speaker 03:
That doesn't seem to help your case, to say that.

[00:43:00] Speaker 00:
Well, it doesn't help us, but it also doesn't hurt us.

[00:43:03] Speaker 00:
Well, then how can it be relevant for the commission to use it?

[00:43:07] Speaker 00:
Well, I don't think that the commission based their opinion on that ratio.

[00:43:11] Speaker 00:
I think they noted it as sort of correlating evidence.

[00:43:15] Speaker 00:
It wasn't the basis of their opinion.

[00:43:17] Speaker 00:
The basis of their opinion was the sale-based allocation approach.

[00:43:22] Speaker 01:
One of the questions that was asked in the beginning of the argument to your opponent was, what about the fact that the statute says you can focus on an industry that's in the process of being established?

[00:43:33] Speaker 01:
certainly that investment to revenue ratio would be relevant to that issue.

[00:43:40] Speaker 01:
But what I understand from your adversary is that he says that you would have had to have plead or plead this in the process of being established industry thing.

[00:43:50] Speaker 01:
That wasn't something that was part of the case.

[00:43:54] Speaker 01:
below for the ITC.

[00:43:56] Speaker 01:
Is that correct?

[00:43:57] Speaker 00:
No, that's not correct.

[00:43:58] Speaker 00:
It was part of the case below.

[00:43:59] Speaker 00:
In fact, our economic expert testified about that and was cross-examined on those points.

[00:44:03] Speaker 00:
So it was part of the case below.

[00:44:05] Speaker 00:
And we point that out in our brief as well.

[00:44:06] Speaker 01:
Did the ITC make any findings related to whether this is an industry in the process of being established, either the ALJ or the Commission?

[00:44:15] Speaker 01:
Did they make findings

[00:44:17] Speaker 01:
about this being an industry in the process of being established and, you know, use any of this data in that way.

[00:44:23] Speaker 00:
The ALJ definitely made that determination, Judge.

[00:44:26] Speaker 00:
And now off the top of my head, I can't tell you if the ITC specifically made that finding.

[00:44:29] Speaker 00:
I apologize.

[00:44:30] Speaker 03:
OK.

[00:44:33] Speaker 03:
The ITC at one point said this is a too competitive market.

[00:44:37] Speaker 03:
A too competitor market?

[00:44:38] Speaker 03:
A too competitor market.

[00:44:39] Speaker 03:
Correct.

[00:44:40] Speaker 03:
And that HealthGen's product is much

[00:44:45] Speaker 03:
cheaper by a gram than your octabule.

[00:44:50] Speaker 00:
That's a factor in our sale-based allocation.

[00:44:52] Speaker 00:
Our sales are not as robust as they could have been because of the anti-competitive behavior of Wuhan North

[00:44:58] Speaker 00:
And one of the reasons the numbers are what they are is it moves on health changes under cut our market because they're the only other competitor and they are pricing it well below.

[00:45:06] Speaker 03:
Going back to my revenue to investment ratio question, you don't really have the rationale you can offer the court on why that's a legitimate way to think about significant or substantial investments.

[00:45:18] Speaker 03:
It sounds like you're kind of blowing it off and saying don't worry about it, it doesn't matter.

[00:45:24] Speaker 00:
I'm not pulling it off, Judge.

[00:45:26] Speaker 00:
What I'm saying is that in this particular situation, it's difficult to have an exact number in that regard because we can't separate out all of the expenditure that was made to develop.

[00:45:35] Speaker 03:
The Commission used it.

[00:45:36] Speaker 03:
The Commission definitely used it.

[00:45:38] Speaker 03:
It did.

[00:45:39] Speaker 03:
I'm asking you to explain whether you can support the Commission's partial reliance on it.

[00:45:44] Speaker 03:
Again, right now, I'm hearing nothing.

[00:45:47] Speaker 00:
Well, I guess, and I apologize for not being clear.

[00:45:51] Speaker 03:
Because you've been trying to avoid it every time I ask you about it.

[00:45:54] Speaker 03:
Is there an answer or not?

[00:45:56] Speaker 00:
I apologize.

[00:45:56] Speaker 00:
That's not my intention to avoid it.

[00:45:58] Speaker 03:
So then tell me a good reason why it actually is rational.

[00:46:01] Speaker 00:
It's rational because there's no question that Ventria spent money to develop the opportunity of the product, but it wasn't able to carve out exactly the amount it spent on that particular product.

[00:46:14] Speaker 00:
So therefore, the ratio cannot be exact.

[00:46:17] Speaker 00:
But there's no question that all this pre-launch, pre-commercialized work was done.

[00:46:22] Speaker 03:
My question is different than your answer.

[00:46:24] Speaker 03:
My question is just the entire nature of using this ratio.

[00:46:29] Speaker 00:
I think it's totally appropriate to use.

[00:46:31] Speaker 00:
Why?

[00:46:32] Speaker 00:
Because it demonstrates what a domestic company is doing to bring a commercial product to market.

[00:46:39] Speaker 00:
And so therefore that ratio is a valid way of measuring whether or not

[00:46:42] Speaker 00:
quantitatively, the domestic company is actually doing what it needs to do to establish domestic industry.

[00:46:51] Speaker 04:
Or maintain a domestic industry?

[00:46:53] Speaker 00:
Or maintain a domestic industry, correct.

[00:46:56] Speaker 01:
Okay, thank you, counsel.

[00:46:57] Speaker 00:
I would just like to make one very one-sentence point about the... No commas, go ahead.

[00:47:04] Speaker 00:
Okay, just I want to point out that reducing SDSP is actually the quantitative methodology that's in the patent itself.

[00:47:10] Speaker 01:
Thank you, and you can have all of your rebuttal time back.

[00:47:15] Speaker 01:
They went over, so I'll give you all your rebuttal time back, but I still think they went over less than you went over first time, but all your rebuttal time back.

[00:47:22] Speaker 05:
I appreciate that, Chief.

[00:47:25] Speaker 05:
So the last point, let me get that first.

[00:47:27] Speaker 05:
It doesn't describe reducing SDS, the patent doesn't describe reducing SDS page as the way to measure all the albumin

[00:47:36] Speaker 05:
aggregates in this sample.

[00:47:38] Speaker 05:
It describes measuring one type of aggregate that is at 270 kilodaltons molecular weight.

[00:47:46] Speaker 05:
HPLC is described as being used to measure the dimer content.

[00:47:52] Speaker 05:
in the same column in column 7-2 in the patent.

[00:47:55] Speaker 05:
So let's go back to the domestic industry.

[00:47:58] Speaker 05:
Your Honor, the only definition of a market that we could find while we were sitting here at council table is the market for rice-derived HSA.

[00:48:11] Speaker 05:
We could not find any specific reference to a market just for optibumen.

[00:48:14] Speaker 05:
And here's why you can't look at it that way, is because if you look at it that way, if you look at the market as being just a patented product,

[00:48:21] Speaker 05:
You would always have significance using this analysis because let's just say you invested $100 into a product and you sold $100 worth of the product.

[00:48:31] Speaker 05:
The market as defined that way is the market for the patented product and so you've got 100% investment revenue ratio.

[00:48:38] Speaker 04:
Would you agree that it is appropriate for the ITC to recognize a domestic industry in a small market specialty good sometimes?

[00:48:48] Speaker 05:
I think under the right circumstances you could make that argument.

[00:48:52] Speaker 05:
What are those circumstances?

[00:48:57] Speaker 05:
I think it's just way too complex of an analysis to start, you know, in a startup.

[00:49:03] Speaker 05:
I think when you've got, remember the statute requires an established domestic industry at the time the complaint is filed.

[00:49:12] Speaker 05:
What you're describing is it's in the process of being created.

[00:49:15] Speaker 05:
That is something that's there.

[00:49:17] Speaker 04:
Well, you talked me out of that, so now I'm focused on just a small market for a specialty good.

[00:49:22] Speaker 04:
a market segment.

[00:49:25] Speaker 05:
Yeah, I think that if you define the market a certain way and there's a reason to define the market that small, but you can't just do this circular thing like, you know, investments in the patented product divided by the market for the patented product, because you will never have a situation where you don't end up with 100 percent in that circumstance.

[00:49:42] Speaker 03:
I can't recall, in your blue or gray brief, did you say it's wrong for the commission to be

[00:49:48] Speaker 03:
Octobumin focused in understanding what is the domestic industry here?

[00:49:54] Speaker 05:
It didn't focus on just Octobumin.

[00:49:56] Speaker 05:
It talked about the market for all the products together.

[00:49:59] Speaker 05:
It never really talked about the specific market.

[00:50:02] Speaker 03:
Well, nothing about the commission though.

[00:50:04] Speaker 03:
The commission sort of sidestepped all of the products and just focused down on the Octobumin.

[00:50:11] Speaker 03:
That included, you know, we like what the ALJ said, given that

[00:50:15] Speaker 03:
everything's happening in the US.

[00:50:17] Speaker 05:
And what the ALJ said just talked about the investments into Octobumen and those were significant.

[00:50:26] Speaker 05:
And just one last point on the investment to revenue ratio.

[00:50:32] Speaker 05:
It is contrived, especially because it's a, the investment, the product specific investments here were calculated in a way that makes that investment

[00:50:44] Speaker 05:
to revenue ratio irrelevant because in order to get that product specific investment number, you need to multiply by the product specific revenue

[00:50:55] Speaker 05:
And then the ratio requires you to divide by that product's specific ratio, and you've just eliminated any influence that the specific product has on that number.

[00:51:05] Speaker 05:
So there's all kinds of reasons why that investment to investment, that investment to revenue ratio is irrelevant.

[00:51:11] Speaker 01:
Okay, Council, we need to cut this off.

[00:51:12] Speaker 01:
I thank all Council members for taking on this submission.