[00:00:19] Speaker 00:
The United States Court of Appeals for the Federal Circuit is now open and in session.

[00:00:23] Speaker 00:
God save the United States and its

[00:00:33] Speaker 02:
We are excited to hold argument today here at Duke's Law School.

[00:00:39] Speaker 02:
Thank you so much for hosting us.

[00:00:44] Speaker 02:
We're excited to be here.

[00:00:45] Speaker 02:
Our first case for argument is 23-1300 Insight Corporation versus Sun Pharmaceuticals.

[00:00:54] Speaker 02:
Council, please proceed.

[00:01:00] Speaker 03:
Thank you, Your Honor.

[00:01:01] Speaker 03:
Please record Mark Feldstein on behalf of Insight.

[00:01:03] Speaker 03:
There are two main issues to address.

[00:01:06] Speaker 03:
The first is standing, where we establish that Insight has concrete plans that have created substantial risk of future infringement.

[00:01:15] Speaker 03:
And then secondly, obviousness, where we show that the board improperly required Insight to select only one compound over other compounds

[00:01:27] Speaker 03:
violation of the holding of Novartis in other similar cases.

[00:01:32] Speaker 03:
On standing, as I mentioned, Insight has declaratory evidence establishing concrete plans to develop a product that- Council, what's the proper date to consider standing from?

[00:01:45] Speaker 03:
We had to have standing as of the day the notice of the bill was filed in December 2022.

[00:01:49] Speaker 01:
Okay, and so what is your best evidence to support that as of that date?

[00:01:56] Speaker 03:
The migration declaration in the first and the supplemental lead declarations both established that prior to that date, Insight had concrete plans, had invested money into the first stage of developing formulations and scaling up

[00:02:11] Speaker 03:
The drug product had a plan for a schedule to go on from there as part of a development process onto human clinical testing and ultimately to NDA filing and marketing.

[00:02:28] Speaker 04:
So I'm not unsympathetic to your argument, but your problem is our precedent seems to require more than that.

[00:02:36] Speaker 04:
at least in the pharma cases, just a mere expression of an intent to explore an area and perhaps go to clinical trials and perhaps spend money, I think we've said is still too speculative to show that you're actually going to produce a product that has a substantial risk of infringement.

[00:02:54] Speaker 04:
Why does just your business plans and your basic intent to produce

[00:03:01] Speaker 04:
go down this path show a substantial risk of producing something that actually infringes, just as opposed to doing exploration in the area that might infringe.

[00:03:15] Speaker 03:
So this is not exploration area that might infringe.

[00:03:18] Speaker 03:
There's a development project

[00:03:20] Speaker 03:
for the specific product with the specific drug component that will be used in the specific population.

[00:03:27] Speaker 02:
Counsel, that was one of my concerns, building off of what Judge Hughes just asked, is you allocated a relatively small amount of money in the pharma world.

[00:03:36] Speaker 02:
I won't say the number, because I think it's confidential.

[00:03:38] Speaker 02:
Is that right?

[00:03:39] Speaker 02:
OK.

[00:03:40] Speaker 02:
A relatively small amount of money.

[00:03:41] Speaker 02:
But what your evidence reflects is that money was exploratory for two components.

[00:03:47] Speaker 02:
for, I'm not going to say this right, Ruxolitinibub.

[00:03:54] Speaker 02:
You're obviously married to a woman because you did that just right.

[00:03:59] Speaker 02:
Ruxolitinibub, whatever, and then the deuterated version.

[00:04:02] Speaker 02:
But the first one is not covered by the patent.

[00:04:05] Speaker 02:
So your company allocated a small amount of money to exploratory research on a product that would use either of two things.

[00:04:16] Speaker 02:
One of which is not even related to the patent.

[00:04:19] Speaker 02:
So we don't know at all how much of your exploration or your development efforts or even how much of that small number of that small amount of money is actually related to advancing a product related to the patent.

[00:04:34] Speaker 03:
So it is related to advancing a product under the patent.

[00:04:38] Speaker 03:
That money was a one-year commitment for the formulation development.

[00:04:44] Speaker 03:
The formulation is common to both ruxolitinib and deuterated ruxolitinib.

[00:04:48] Speaker 03:
So it all effectively supports the product with deuterated ruxolitinib in it.

[00:04:55] Speaker 02:
Well, not necessarily.

[00:04:58] Speaker 02:
That's like me saying that this exercise I'm doing is great for skiing and it's also great for running track.

[00:05:07] Speaker 02:
That's like saying almost anything we do is going to be good because it's going to be helpful to some product.

[00:05:16] Speaker 03:
There's a common excipient formulation that's used for both.

[00:05:21] Speaker 03:
The early money was... Are you trying to use the water bottles as a demonstrative?

[00:05:24] Speaker 02:
What's going on there?

[00:05:25] Speaker 02:
Or were you just thirsty but you changed your mind?

[00:05:27] Speaker 03:
That was my excipient.

[00:05:32] Speaker 03:
an excipient formulation suitable for using with either rux litinib or deux rux litinib.

[00:05:38] Speaker 03:
That was the very first early stage work.

[00:05:40] Speaker 03:
The formulation, while it can be used for either rux litinib or deux rux litinib, is supporting fully the deuterae rux litinib work.

[00:05:50] Speaker 02:
Did you make this argument in your brief?

[00:05:52] Speaker 02:
Because that's one of the things when they raised this point about how this exploratory money actually goes to two things, only one of which is covered by the patent.

[00:06:00] Speaker 02:
I don't remember you responding to that.

[00:06:02] Speaker 03:
I think it's in the Lee Declaration or the Supplemental Lee Declaration.

[00:06:05] Speaker 02:
No, in your brief.

[00:06:05] Speaker 02:
I didn't ask you if it's in the Lee Declaration.

[00:06:06] Speaker 02:
I asked you whether you raised this argument in your brief because I don't remember seeing it.

[00:06:11] Speaker 03:
I don't think we explained to answer the question that the court is asking now, why the formulation development is applicable to both.

[00:06:18] Speaker 03:
But it's the facts that support the case.

[00:06:20] Speaker 03:
It's in the record.

[00:06:21] Speaker 03:
It's power of declaratory evidence.

[00:06:24] Speaker ?:
Okay.

[00:06:25] Speaker 01:
How far along were you in clinical trials as of the applicable date, the timing of the notice of appeal?

[00:06:31] Speaker 03:
Clinical trials had not started.

[00:06:33] Speaker 03:
And to the extent this is, or Judge Hughes' earlier question is related to the pharma development timeline and Algenesis, I don't think that there is a holding from this court saying that early pharmaceutical development doesn't create a substantial risk for future infringement.

[00:06:47] Speaker 03:
The fact that there is a timeline to be had for pharmaceutical development

[00:06:52] Speaker 03:
In fact, I think amplifies the concern here, amplifies the injury, because it doesn't turn on a dime.

[00:06:59] Speaker 03:
You have to invest large amounts of money to get a product ultimately to market.

[00:07:03] Speaker 03:
And injury from an interfering, potentially blocking pattern, makes it all worse.

[00:07:08] Speaker 03:
What's your best case from us on why you have standing?

[00:07:12] Speaker 03:
I think GE is closest to the facts.

[00:07:15] Speaker 03:
GE was developing the product.

[00:07:18] Speaker 03:
It might or might not proceed.

[00:07:20] Speaker 03:
I assume you mean the second GE, not the first GE.

[00:07:22] Speaker 03:
So I mean the second GE, I only have one in mind.

[00:07:26] Speaker 04:
Well, the first GE, which you cited to my concurring opinion, is unfortunately not the law, which would help you a lot.

[00:07:37] Speaker 04:
But the second GE, we did find standing.

[00:07:39] Speaker 04:
But I think that the declaration there was much more specific about the fact that it intended to develop a product

[00:07:49] Speaker 04:
and sell it to its customers that would impregnate and the problem here is

[00:07:55] Speaker 04:
And maybe it's because the pharmaceutical sphere is different, and we have different precedent on that.

[00:08:01] Speaker 04:
But I don't think your declaration rises to that level, does it?

[00:08:05] Speaker 03:
I respectfully, and it is GE versus Raytheon, the 2020 opinion that you wrote, the majority opinion we're relying on here.

[00:08:14] Speaker 03:
Do you have a pharma case that supports what you want to do here?

[00:08:20] Speaker 04:
The facts, I think, are closest to G versus right beyond where... I mean, isn't that the problem is that we've said in the pharmacosphere that development of compounds and treatments and dosages is far less predictable and that you have to have more concrete evidence of standing that you'll have a substantial risk of infringement.

[00:08:44] Speaker 03:
Whether that's right or not, that's what we've said and we have to follow it.

[00:08:47] Speaker 03:
And what we do here is we do have concrete evidence of record on why this product is different than starting from a scratch new molecule development.

[00:08:57] Speaker 03:
This is a molecule that's already been tested for alopecia areata, which is the indication we're using.

[00:09:02] Speaker 03:
It's for topical formulation or topical work for treating alopecia areata has already been done.

[00:09:08] Speaker 03:
The company Insight has already gotten approval both for the parent molecule, ruxolitinib, orally and topically.

[00:09:18] Speaker 03:
There's approved Jacklify for oral, and then there's approved Opsilora ruxolitinib topically.

[00:09:25] Speaker 03:
So this is not starting from a brand new clean blank slate.

[00:09:29] Speaker 03:
It's building on

[00:09:30] Speaker 03:
already built work and decades of experience.

[00:09:33] Speaker 04:
So your essential argument is you invented the lead compound or whatever you want to call it.

[00:09:39] Speaker 04:
I can't say that word at all.

[00:09:40] Speaker 04:
I don't even want to try it.

[00:09:42] Speaker 04:
And you have it for both topical and for oral.

[00:09:47] Speaker 04:
I think it is the patent for topical.

[00:09:49] Speaker 03:
The patent here is neutral to the... Okay.

[00:09:53] Speaker 04:
But theirs is for a deuterated version, which is a relatively new technique, but also pretty well known by now.

[00:10:04] Speaker 03:
A relatively new technique, pretty well known, and found obvious.

[00:10:07] Speaker 04:
So your best argument is we invented this compound, the non-deuterated version of the compound,

[00:10:13] Speaker 04:
So we know how to actually create the compound.

[00:10:17] Speaker 04:
We've done it for both oral and topical, and it's a relatively simple transition to a deuterated one.

[00:10:24] Speaker 04:
And you have evidence showing you intended to produce that, and that should give you a standing.

[00:10:28] Speaker 03:
And building on it, yes, Your Honor, building on that, both roxolidib and deuterate roxolidib have been shown to be effective for alopeciureata.

[00:10:35] Speaker 03:
So it's not going in and testing it in a field where nothing's been done yet.

[00:10:39] Speaker 03:
Both the parent compound

[00:10:41] Speaker 03:
And it's just a matter of an optimized formulation at this point to get a top right for where there's an unmet need that's motivating the work from inside in this regard.

[00:10:57] Speaker 02:
So can I, I just want to make sure I understand where things stood in let's say October of 2022.

[00:11:03] Speaker 02:
Is it true that in October of 2022, you had, way back, you had had some prior development in this space, but that it had been shelved in favor of pursuit of a different product at that time?

[00:11:17] Speaker 03:
So 2015, there was a topical study of ruxolit nib for alopecia areata.

[00:11:25] Speaker 03:
That was put on the shelf or put in the back burner, while other indications

[00:11:30] Speaker 03:
for topical were developed and ultimately approved in I think 2020.

[00:11:37] Speaker 03:
Other indications topical drugs that were approved and then this was picked up and money was devoted to this.

[00:11:45] Speaker 02:
But when?

[00:11:46] Speaker 02:
When was it picked back up and money devoted to it?

[00:11:49] Speaker 02:
The evidence in the record, when does it show that something happened to initiate or reinitiate your interest in pursuing this?

[00:11:58] Speaker 03:
The financial commitment was November of 2022.

[00:12:01] Speaker 02:
And what is the date here that we're worried about?

[00:12:03] Speaker 03:
December.

[00:12:03] Speaker 02:
So, I mean, they kind of, I think, argue in their brief that this is very shammy, you know, looks kind of like a sham, looks like they threw a little bit of money at development of multiple things, only one of which is covered by the patent, and they did it on the eve of the notice of appeal.

[00:12:19] Speaker 02:
And that, do we not take all that into account when we're trying to figure out whether there is standing here?

[00:12:24] Speaker 03:
So I think it's the objective question of whether there's declaratory evidence establishing that what we were doing at the time

[00:12:33] Speaker 03:
were concrete plans that created a substantial risk.

[00:12:36] Speaker 03:
This wasn't a sham setup.

[00:12:37] Speaker 03:
This is not Insight Pharmaceutical Company going to make rocket engines or offering to make rocket engines.

[00:12:43] Speaker 03:
This is the sandbox that Insight invented and developed, and it's just the next progression beyond where they already are.

[00:12:52] Speaker 01:
Can you look at the Pinnix page 12061?

[00:12:59] Speaker 01:
And I understand that you've identified some of the information on this page as confidential, so I will talk about it at a high level, but let me know when you get to Appendix Page 12061.

[00:13:21] Speaker 01:
This follows up on Chief Judge Moore's question about kind of that sum of money she was talking about.

[00:13:29] Speaker 01:
At least figure one, and I'm going to say the first red bar in figure one seems to identify the amount specifically of the larger amount that would just be focused on the relevant drug here.

[00:13:44] Speaker 01:
Do you agree with that?

[00:13:46] Speaker 01:
I'm sorry, can you say that again?

[00:13:48] Speaker 01:
So I'm looking at figure one and there are a couple of red bars.

[00:13:50] Speaker 01:
Do you see that in figure one?

[00:13:52] Speaker 01:
I think the top red bar seems to provide the amount that is applicable here and separates it out from the other product that I know that you two were discussing.

[00:14:03] Speaker 01:
I'm trying to differentiate that pot of money is what I'm trying to do right now.

[00:14:09] Speaker 03:
Money that was allocated for fiscal year 2023 is the second row on the Gantt chart.

[00:14:16] Speaker 03:
It's the formulation, it's 2023 money for formulation development for the topical product.

[00:14:24] Speaker 01:
Okay, so you're saying of these two red bars, the applicable red bar is the second red bar?

[00:14:28] Speaker 03:
For the 2023 investment, correct.

[00:14:31] Speaker 01:
Can you tell me what the first red bar is?

[00:14:36] Speaker 03:
That was other work that started in the previous year in 2022 on the scale up of developing the compound.

[00:14:46] Speaker 03:
And there's a chart in the first lead declaration that shows that scale up of the molecule to be able to synthesize it.

[00:14:59] Speaker 02:
Do you want to save some time for rebuttal council?

[00:15:17] Speaker 05:
I think it makes sense to start with standing, although obviously one point of commonality between standing and the merits is the significance of the fact that this is a method patent for using a specific compound to treat a specific disorder in specific therapeutic amounts and one of the things that

[00:15:35] Speaker 05:
My friend didn't get to in his discussion of standing, have even gotten to whether if they develop a formulation and if they bring it to market and if they get it with approval, whether it would even infringe, even under those circumstances.

[00:15:48] Speaker 05:
And so I think that is one of the key things that separates this, even Judge Hughes from the scenario that you opined on in your concurrence in GE.

[00:15:55] Speaker 05:
In that case, GE wanted to make a design that its customers wanted, or it was going to have to spend money to design around the patent, and there's no indication that that's the case here.

[00:16:12] Speaker 04:
Can you help me?

[00:16:12] Speaker 04:
We've been talking a lot about specific facts.

[00:16:16] Speaker 04:
We're an appellate court, so we don't usually do fact-finding.

[00:16:20] Speaker 04:
Do you have any kind of help for us on how this is usually done in other circuits?

[00:16:25] Speaker 04:
Particularly, I imagine this comes up in the D.C.

[00:16:27] Speaker 04:
Circuit all the time.

[00:16:28] Speaker 05:
It does come up in the D.C.

[00:16:29] Speaker 05:
Circuit all the time, and what the circuit has said is that you follow the ordinary summary judgment framework.

[00:16:37] Speaker 05:
So there's a production burden on the party that has the burden.

[00:16:42] Speaker 05:
So here the burden is on insight.

[00:16:44] Speaker 05:
So they had to come forward not later than the opening brief with their evidence of standing and then the critical date of course is when you invoke federal jurisdiction with the filing of the notice of appeal.

[00:16:56] Speaker 05:
In most cases, I will say candidly in the D.C.

[00:16:59] Speaker 05:
Circuit that either that allegation on its face is insufficient, so it doesn't have to be repudded, or it is sufficient and the other side doesn't successfully controvert it.

[00:17:12] Speaker 05:
I haven't found a case in which

[00:17:15] Speaker 05:
essentially there's like a direct fact dispute that the appellate court has to referee.

[00:17:21] Speaker 04:
I don't think that's the case.

[00:17:21] Speaker 04:
Do you think if there was a fact dispute, we would resolve it in the way you do, for instance, a motion for judgment on the administrative record?

[00:17:29] Speaker 04:
I think that's basically right.

[00:17:31] Speaker 04:
I mean, we're obviously not going to hold hearings and hear witnesses, I don't think.

[00:17:38] Speaker 05:
I mean, the other side is taking the position that essentially, you know, appellant always wins in that circumstance, right?

[00:17:44] Speaker 05:
That you don't resolve the fact dispute, you just believe the appellant.

[00:17:48] Speaker 05:
I mean, to be clear, here we don't think that even if you credit everything in the declarations that they would have standing.

[00:17:53] Speaker 05:
I agree that it's a hard question.

[00:17:56] Speaker 05:
I mean, I'll tell you that the Ninth Circuit has an appellate commissioner that it uses for cases where it has to do something that looks more like fact-finding.

[00:18:05] Speaker 02:
I point you.

[00:18:11] Speaker 01:
Sorry.

[00:18:11] Speaker 01:
Counselor, what is your best case?

[00:18:13] Speaker 01:
So, opposing Counselor Nikita, they thought their most applicable case was the GE case.

[00:18:17] Speaker 01:
What is the case you think is most applicable to the standing issues here?

[00:18:20] Speaker 05:
So I think that there are several pharma cases.

[00:18:25] Speaker 05:
I think that Moderna is one and there are two Moderna cases, but Moderna is one.

[00:18:33] Speaker 05:
I think Argentin is helpful to us as well.

[00:18:35] Speaker 05:
And what those cases make clear is that you don't have to have, you know, actually gotten FDA approval.

[00:18:43] Speaker 05:
That's not our position.

[00:18:44] Speaker 05:
You don't even necessarily have to have submitted your application, right?

[00:18:48] Speaker 05:
But as in Altair, for example, you know, it helps a lot if you're on the eve of submitting your application so that you've actually arrived at what your formulation will be.

[00:18:58] Speaker 05:
And it's possible to assess the relevant question.

[00:19:00] Speaker 05:
And the relevant question is, is there a substantial likelihood that the product that you're seeking to market will face an accusation of infringement?

[00:19:08] Speaker 05:
And this is one area in which pharmaceuticals are different, not just because of the uncertainty of the development process, but also because of the safe harbor.

[00:19:16] Speaker 05:
In a non-pharma case, making the product for testing is still making the patented product.

[00:19:22] Speaker 05:
But that's not the case in the pharmaceutical space.

[00:19:24] Speaker 05:
And that's why this court's cases have always focused on

[00:19:26] Speaker 05:
what will be marketed, and that means what will be approved by the FDA.

[00:19:31] Speaker 04:
I mean, doesn't the fact that there's all this unpredictability in the pharma kind of cut both ways?

[00:19:38] Speaker 04:
Because if you're starting out at the very beginning and you know there's a patent out there that is in the general area and it's something you might run into, I would think you would have an interest in trying to invalidate it at the PTAB.

[00:19:51] Speaker 04:
even if you didn't know for sure, your research and your expenditure money were going to lead to infringement.

[00:20:00] Speaker 05:
Well, so the thing about the PTAB, right, is that even people who don't have an interest that rises to Article 3, they can go do that.

[00:20:08] Speaker 04:
I mean, maybe that's part of the problem is that Congress should put a standing requirement at the PTAB and then they wouldn't have shoved this mess to us, but they didn't, so we're here.

[00:20:19] Speaker 04:
But

[00:20:20] Speaker 04:
You have pharmaceutical cases all the time.

[00:20:24] Speaker 04:
They're really expensive to develop drugs.

[00:20:26] Speaker 04:
And why would you go down the path of even just starting out and spending all that money if there was a potential that the results you came up with would violate a patent?

[00:20:41] Speaker 05:
Well, I think that that happens all the time, respectfully, Judge Hughes.

[00:20:45] Speaker 05:
I mean, that's why there is Hatch-Waxman.

[00:20:47] Speaker 05:
That's, you know, that is why drug development continued before there was a PTAB, that there is some uncertainty and there and people do spend money assessing.

[00:20:56] Speaker 04:
I guess, but the fact that you can go through Hatch-Waxman and try to get it invalidated if you do a generic or something, it isn't really, to me, very relevant to the the core question here, which is, is are we really

[00:21:08] Speaker 04:
complying with the basic requirements of Article 3 and standing in this pharmaceutical space, or have we imposed a heightened burden that's inconsistent with standing law in general?

[00:21:19] Speaker 05:
No, it definitely is not a heightened burden because it just reflects what is infringing conduct in this space.

[00:21:25] Speaker 05:
And the other variable that's relevant to that is, what does the relevant patent claim?

[00:21:31] Speaker 05:
And now, if the patent is on a compound,

[00:21:34] Speaker 05:
It may well be easier to say, we are set on developing this compound and we will infringe no matter what formulation we bring it to market.

[00:21:41] Speaker 04:
So if hypothetically your patent was just on the deuterated compound here, then do you think they would have standing?

[00:21:48] Speaker 05:
If their patent was on the deuterated compound, I think they'd be a lot closer.

[00:21:52] Speaker 05:
I mean, they obviously, we would still make the same points about what was happening in December of 2022 and whether they were investing in actually bringing the deuterated compound to market.

[00:22:02] Speaker 04:
So does your argument kind of depend on the fact that the actual patent here is a fairly narrow patent on a specific method and specific dosages of a specific deuterated compound?

[00:22:13] Speaker 05:
I mean, there's a reason why that's,

[00:22:17] Speaker 05:
That is why I began there, because I think I won't say it depends on it, because I think the answer to Judge Cunningham's questions about December 2022 still turn on what were their plans then.

[00:22:28] Speaker 05:
But even spotting them all of that, the fact that this is a method patent, not just to make the compound, but to actually treat a particular disorder and to do it with a particular dosing regime, that I think they can't get over.

[00:22:41] Speaker 05:
And they didn't try to get over it in the first declarations.

[00:22:44] Speaker 05:
their attempts to get over it in the second lead declaration, it's entirely phrased in the passive voice that the product will be administered, but that is not the same thing as establishing that they are going to label their product to counsel patients or doctors to infringe.

[00:23:02] Speaker 05:
And so they just haven't established

[00:23:04] Speaker 05:
that they face a substantial likelihood of being accused of infringement, even with where they are today.

[00:23:11] Speaker 04:
I'm going to ask you a little bit of an off the wall question, because we're in front of students.

[00:23:14] Speaker 04:
And also, it just occurred to me, since we're talking about how narrow this is, would it make any difference if they said, well, we don't know if we're going to come up with this same exact dosing regime.

[00:23:26] Speaker 04:
But if we come anywhere close, the patentee is going to argue it infringes under the doctrine of equivalence.

[00:23:33] Speaker 04:
Would that give them if they said that in their declaration additional support for standing.

[00:23:37] Speaker 05:
Well, I don't think that it wouldn't that even necessarily turns on what the path what they recite in their declaration right because ultimately the question is, is there a substantial likelihood, and I mean that.

[00:23:50] Speaker 05:
They absolutely don't have to establish that they would infringe.

[00:23:53] Speaker 05:
And so the doctrine, I think, takes account of some uncertainty about who might win a contested argument about what the patent covers or what is covered through the doctrine of equivalence.

[00:24:05] Speaker 05:
But even spotting.

[00:24:06] Speaker 04:
So if your patent said, our testing regime is, you know, whatever, 2 milligrams,

[00:24:10] Speaker 04:
and they say we can design around this and do it at 15 milligrams, that would still might be enough to get standing because you could potentially argue that there's still substantial risk of infringement under that dosing regime.

[00:24:24] Speaker 05:
If they had an oral product and so they were doing the same function and they were able to come in and show why they

[00:24:31] Speaker 05:
risk being accused of doing the same function in the same way with the same result, then they'd have a stronger case.

[00:24:38] Speaker 05:
But of course, you know, here they have this topical formulation, and they're trying in their declarations to convert, you know, percentages of weight into milligrams of product.

[00:24:49] Speaker 05:
And what they don't say, even after we've pointed this out, is that anything in their labeling would turn on administering a particular

[00:24:57] Speaker 05:
dosage, in other words, like a particular number of milligrams of deuterated cruxulin per day.

[00:25:02] Speaker 05:
And without that, you don't infringe the claims, you don't come anywhere near the claims, and the substantial likelihood.

[00:25:07] Speaker 05:
I don't think you could just say, you know, patentees are aggressive and they assert the doctrine of equivalence all the time.

[00:25:13] Speaker 05:
I don't think that would be enough for standing.

[00:25:15] Speaker 05:
If that answers your question.

[00:25:17] Speaker 02:
Is your patent claim to only topical or only oral, or does it cover both?

[00:25:21] Speaker 05:
Claim one doesn't specify.

[00:25:23] Speaker 02:
So it could be either?

[00:25:25] Speaker 05:
It could, but it does have to be.

[00:25:26] Speaker 05:
The dosing regime is in the claims as well.

[00:25:29] Speaker 05:
So it has to be either 16 or 24 per day.

[00:25:33] Speaker 05:
So I'm not saying that it's impossible.

[00:25:35] Speaker 02:
How do you administer 16 milligrams a day topically?

[00:25:38] Speaker 05:
That's that's exactly the question that is not answered in the standing declarations like they don't have a theory of that.

[00:25:45] Speaker 05:
I think what what they've tried to do in the reply is to have a little graph and they say essentially someone somewhere some patient somewhere will at some point be at the at 16 milligrams on the y axis.

[00:25:58] Speaker 05:
And so we'll look down to where on the x axis that is.

[00:26:01] Speaker 02:
Like if you put enough cream on at some point, somebody will absorb exactly 16 milligrams worth or something like that, or the equivalent thereof.

[00:26:09] Speaker 02:
It'll put into your body whatever the measurable

[00:26:15] Speaker 02:
I don't know, results of 16 milligrams are?

[00:26:17] Speaker 05:
Is that... I take it to be... I take that to be their standing theory at page 12069 of the second lead declaration.

[00:26:25] Speaker 02:
That's the second, yeah, second declaration.

[00:26:27] Speaker 05:
Yeah, that will be administered.

[00:26:28] Speaker 02:
I mean, so do you believe that this creates an independent reason for no standing, or do you believe that I have to also agree

[00:26:37] Speaker 02:
with your characterization of the small amount of money allocated to the development of products related to both the deuterated version and the non-deuterated version as a sham.

[00:26:50] Speaker 02:
Do I have to kind of, because that's me having to buy into fact finding in your favor about their intent.

[00:26:56] Speaker 02:
I mean, it doesn't look good that the eve of the notice of appeal, but you're making me do an awful lot of work to get there that route.

[00:27:02] Speaker 05:
So each of our standing arguments is independent of each other.

[00:27:06] Speaker 05:
So in other words, if you agree with me about the dosing regimen, then that's all you need to decide.

[00:27:11] Speaker 05:
And I think we have I would say we have three pieces.

[00:27:13] Speaker 05:
One is what were they actually doing in December 2022?

[00:27:17] Speaker 05:
The second is just the sheer uncertainty that persists even today and even as of their letter this week.

[00:27:22] Speaker 05:
about what their formulation will wind up being.

[00:27:25] Speaker 05:
And then the third point is about the dosing regimen.

[00:27:29] Speaker 05:
And the uncertainty on any one of those three would be enough to defeat standing.

[00:27:32] Speaker 05:
And in this case, given the nature of the claims of this patent.

[00:27:38] Speaker 04:
I mean, are you aware of any other area of the law on standing where a court's required to delve into the minutiae of, I mean, it's almost like we're turning this into a mini-imprisonment trial on appeal and arguing about dosage and all this kind of stuff.

[00:27:56] Speaker 04:
And it seems to me that this is far removed from the inquiry most courts undertake when they're looking just at Article III standing.

[00:28:04] Speaker 05:
I don't agree that it's different.

[00:28:06] Speaker 05:
But let me explain how.

[00:28:07] Speaker 05:
But let me just underscore one more time that we think that the question is not, would they infringe?

[00:28:14] Speaker 05:
They could establish standing by showing a substantial likelihood that they will be accused of infringement.

[00:28:20] Speaker 05:
But the reason why I don't think this is different from the way standing works in other appellate settings, where what's happening is someone is challenging a government action.

[00:28:31] Speaker 05:
The question is always, is that government action harming the petitioner or appellant and would canceling that government action or overturning it grant redress for that injury?

[00:28:44] Speaker 05:
And so in a patent case coming out of the PTAB, the government action involves the patent.

[00:28:49] Speaker 05:
So in other words, you have to be focused not on what is Sun's product, but what is Sun's patent and how is Sun's patent harming

[00:28:57] Speaker 05:
insight such that if it were canceled, that injury would be redressed.

[00:29:06] Speaker 05:
And all of their assertions about competitive harm and so on, in this context,

[00:29:13] Speaker 05:
They can't just argue, and the other courts of appeals agree with this point, that what's bad for you is good for me and vice versa, and so therefore I have standing to get the government to do bad things to you or to take away good things that have been done in your benefit.

[00:29:28] Speaker 05:
The government action actually has to have a direct impact on the competition between the parties.

[00:29:33] Speaker 05:
And so Sun doesn't need a patent in order to market a competing product.

[00:29:38] Speaker 05:
And that's why the competitive injury is divorced from the patent.

[00:29:41] Speaker 05:
That is just basic Article III injury in fact, redressability and traceability.

[00:29:45] Speaker 05:
I don't think it's different from how the other courts of appeals deal with this at all.

[00:29:49] Speaker 01:
And Council, just so we level set on this, my understanding is we also already have ruled that they can't rely on the supplemental declaration in terms of standing on appeal.

[00:29:59] Speaker 01:
Is that my understanding accurate?

[00:30:00] Speaker 05:
So there were three lead declarations.

[00:30:03] Speaker 05:
The third one is out.

[00:30:05] Speaker 05:
I think the second one we objected to as well.

[00:30:08] Speaker 05:
The motions motions judge allowed it to be included in the appendix, but I think has sort of deferred to this panel on whether

[00:30:14] Speaker 05:
it's even proper in reply, and so we stand on our objection to that, that the phygenics and other cases say that it's your burden to alleged standing with your opening brief.

[00:30:24] Speaker 05:
Unless the court has any further questions.

[00:30:26] Speaker 02:
Okay, thank you, Mr. Jay.

[00:30:27] Speaker 02:
Thank you.

[00:30:28] Speaker 02:
Mr. Shelstein, you have some revival time.

[00:30:29] Speaker 03:
Thank you, Your Honor.

[00:30:33] Speaker 03:
If I can just clarify, this isn't a case where the product is unknown and there's uncertainty about how it overlaps with the patent.

[00:30:40] Speaker 03:
The product is clear what the molecule is.

[00:30:43] Speaker 03:
There are basically only three limitations to the claim.

[00:30:46] Speaker 03:
There's the molecule, that's clear in the product.

[00:30:49] Speaker 03:
There's the indication, that's clear in the product.

[00:30:52] Speaker 03:
There's the dose.

[00:30:53] Speaker 01:
But what is your response about the fact that it's fundamentally a method claim?

[00:30:57] Speaker 01:
Because that was one of the things that opposing counsel pointed out.

[00:31:00] Speaker 03:
In terms of inducement, Your Honor?

[00:31:04] Speaker 01:
I mean, you just told me that you're going to talk about the product, but I wanted to turn to maybe claim one, maybe put it in context of what's actually in the patent itself, and tell me why you would have standing in light of what's shown in the little claim language of claim work.

[00:31:17] Speaker 03:
Sure.

[00:31:17] Speaker 03:
So the product is a product intended for use for

[00:31:21] Speaker 03:
treating alopecia areata.

[00:31:23] Speaker 03:
The method is simply using a product to treat alopecia areata at a dose.

[00:31:28] Speaker 03:
There's no more to it than that.

[00:31:30] Speaker 03:
It's not a particularly narrow claim.

[00:31:32] Speaker 03:
It doesn't limit it to be whether it's like oral or topical or injectable.

[00:31:36] Speaker 03:
There's absolutely no limit on the delivery method.

[00:31:39] Speaker 03:
So it's not a narrow claim.

[00:31:41] Speaker 03:
It has only requirements of the drug, the indication, and the dose.

[00:31:46] Speaker 01:
So what is your response, though, to opposing counsel's argument that even as of today, the dosing is still somewhat unknown?

[00:31:53] Speaker 03:
So what the record establishes, particularly the supplemental lead declaration, is that in the intended patient population... He pointed out, I just want to be specific, he pointed out that there are multiple lead declarations.

[00:32:05] Speaker 01:
So when you say supplemental lead declaration, is it specific in terms of the date of that declaration?

[00:32:09] Speaker 03:
One, two, or three?

[00:32:10] Speaker 03:
Sure.

[00:32:10] Speaker 03:
It's titled supplementary declaration and its appendix page 12067 where I'm referring right now.

[00:32:17] Speaker 03:
And in there, Dr. Lee explains how the formulations that are in development, each one of them used in the intended patient population

[00:32:28] Speaker 03:
for the expected use that they'll have, the area that alopecia patients have and need treatment, that those patients will use them, some of them will use them at the claimed dose.

[00:32:40] Speaker 03:
I don't think there's a dispute factually on whether that'll happen.

[00:32:44] Speaker 03:
The dispute ultimately then comes down to is will there be an inducement, but that still seems to put us in a substantial risk.

[00:32:51] Speaker 01:
So just using the framework that Chief Judge Moore set out, is that declaration one, two, or three?

[00:32:56] Speaker 03:
It's declaration two.

[00:32:58] Speaker 02:
And why should we allow that?

[00:33:01] Speaker 02:
I mean, they objected to it, and we have to rule on that as part of this decision.

[00:33:05] Speaker 02:
And it wasn't part of your initial filing.

[00:33:08] Speaker 02:
It wasn't in existence at the time of your filing.

[00:33:11] Speaker 02:
Why should we nonetheless accept it?

[00:33:13] Speaker 03:
So the firstly declaration did address that the doses will be used.

[00:33:17] Speaker 03:
And then there were arguments that we responded to from Sun.

[00:33:23] Speaker 03:
They had a sir reply to those arguments.

[00:33:26] Speaker 03:
Son's arguments were that it was a sham.

[00:33:28] Speaker 03:
This wasn't going to hit the hit the dose limits that it wasn't a good faith product project and the sub-mentally doctoration is in response to those arguments.

[00:33:39] Speaker 03:
They noted, some noted in the docking statement that they were going to challenge standing.

[00:33:43] Speaker 03:
If they had filed a motion at the time, we would have known their arguments.

[00:33:46] Speaker 03:
We didn't know their arguments on what they were going to dispute until they disputed them in response to our opening brief.

[00:33:53] Speaker 03:
We replied to them.

[00:33:54] Speaker 03:
The court allowed them to have a reply.

[00:33:56] Speaker 03:
You should all be considered.

[00:34:02] Speaker 02:
Okay.

[00:34:02] Speaker 02:
Thank both counsel.

[00:34:03] Speaker 02:
This case is taken under submission.

[00:34:05] Speaker 03:
Thank you.