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`
` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` ____________________________
`STEADYMED LTD., STEADYMED THERAPEUTICS, INC.
` and STEADYMED U.S. HOLDINGS, INC.
` Petitioner
` v.
` UNITED THERAPEUTICS CORPORATION
` Patent Owner
` _____________________________
` Case No. IPR2016-00006
` Patent No. 8,497,393
` _____________________________
`
` TELEPHONIC CONFERENCE CALL
` January 3, 2018
`
` Reported by: Mary Ann Payonk
` Job No. 135750
`
`TSG Reporting - Worldwide 877-702-9580
`
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`P. 1
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

`Page 3
`BEFORE ADMINISTRATIVE PATENT JUDGES:
` Judge Jacqueline T. Harlow
` Judge Lora M. Green
` Judge Joni Y. Chang
`
` ON BEHALF OF PETITIONER:
` LISA HAILE, ESQUIRE
` STUART POLLACK, ESQUIRE
` DLA PIPER
` 1251 Avenue of the Americas
` New York, New York 10020
` ON BEHALF OF PATENT OWNER:
` STEPHEN MAEBIUS, ESQUIRE
` GEORGE QUILLIN, ESQUIRE
` FOLEY & LARDNER
` 3000 K Street, N.W.
` Washington, D.C. 20007
` ON BEHALF OF UNITED THERAPEUTICS:
` RICHARD TORCZON, ESQUIRE
` BOBBY DELAFIELD, ESQUIRE
` WILSON SONSINI GOODRICH & ROSATI
` 1700 K Street, N.W.
` Washington, D.C. 20007
` ALSO PRESENT:
` Shaun Snader, United Therapeutics
`
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` MS. HAILE: Actually, Stuart, Lisa
` Haile is also on the line with
` SteadyMed.
` MR. POLLACK: Oh, okay. I'm sorry.
` I stand corrected.
` MS. HAILE: That's okay.
` JUDGE HARLOW: Thank you,
` Mr. Pollack and Ms. Haile. Patent
` Owner, would you please introduce
` yourself and any colleagues you might
` have on the line?
` MR. MAEBIUS: Yes, Your Honor.
` This is Steve Maebius from
` Foley & Lardner, and I have George
` Quillin with me here as well. And also
` Shaun Snader is on the line from United
` Therapeutics, and Bobby Delafield and
` Richard Torczon from Wilson Sonsini.
` JUDGE HARLOW: Thank you very much,
` Mr. Maebius. With that, Mr. Pollack, if
` you'd like to address your request for
` authorization, you may proceed.
` MR. POLLACK: Thank you, Your
` Honors. Section 42.73(d)(3) addresses
`
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` January 3, 2018
` 2:00 p.m.
`
` TELEPHONIC CONFERENCE CALL BEFORE the
`Panel among the respective parties, reported by
`Mary Ann Payonk, CA-CSR, Certified Realtime
`Reporter.
`
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` JUDGE HARLOW: Good afternoon.
` This is Judge Harlow. Judges Green and
` Chang are also on the line. We are
` going to have a conference call with in
` IPR2016-00006, SteadyMed versus United
` Therapeutics. Is there a court reporter
` on the line?
` MR. MAEBIUS: Yes, there is, Your
` Honor.
` JUDGE HARLOW: Thank you. Today we
` are going to discuss Petitioner's
` request for authorization to file a
` motion asking the Board to take
` jurisdiction over continuing
` applications under 37 CFR 42.76. With
` that introduction, counsel for
` Petitioner, will you please introduce
` yourself and anyone you might have on
` the line with you.
` MR. POLLACK: Thank you, Your
` Honors, and happy New Year. This is
` Stuart Pollack for Petitioner SteadyMed.
` I'm going to be the only one on the line
` for SteadyMed.
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`TSG Reporting - Worldwide 877-702-9580
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`2
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`P. 2
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

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`TELEPHONIC CONFERENCE CALL 1/3/2018
` the situation we are in now where a
` final written decision has been
` affirmed, the mandate has issued, no
` further appeals may be taken and there
` are continuation applications pending on
` the patent whose claim's been canceled
` in the IPR. And those continuation
` application's claims are not patently
` distinct from the claims that have been
` canceled.
` I'll discuss the new continuation
` claims in a little more detail shortly,
` but the examiners issued
` obviousness-type double patenting
` rejections over the '393 patent claims
` in all three of those continuations, and
` in the first of those continuations the
` patent owner has obviated that objection
` by filing a terminal disclaimer.
` So just turning back to 42.73, you
` know, according to its terms, Section
` 42.73 in Section C authorizes the Board
` to provide a recommendation for further
` action by an examiner or the director,
`
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` the patent applicant tried to get new
` claims that were similar but not
` patentably distinct. And there, the
` Federal Circuit held that the patent
` statute intends that only one patent
` should issue for one inventive concept.
` And since the applicant was not entitled
` to the claims for that concept, they
` couldn't pursue claims, additional
` claims, in their continuation. So it's
` very similar here.
` In fact, the Board has recognized
` in In Re: Deckler in a prior IPR in
` Smith & Nephew v. Arthrex, that's
` IPR2016-0917. In Paper 12 entered on
` September 21, 2016, the Board found that
` it was necessary to enter an adverse
` judgment where the patent owner
` disclaimed all the claims in the patent
` before institution. The reason why they
` did that is otherwise, the estoppel
` provision, they said, in 42.70(d)(3)
` would not apply and the patent owner
` would be able to pursue patentably
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` and that's what we're looking for here
` is for the Board to take action by
` making a recommendation to the examiner
` or the director.
` And I think by recommendation here
` I don't think they're making a
` suggestion but rather a statement to
` them that patentability claims cannot
` continue to be pursued in these
` continuations.
` The ability to direct other parts
` of the office to take this action is the
` only way that the Patent Office can
` comply with the Administrative Procedure
` Act and the constitution. It's
` consistent with the Federal Circuit's
` decision in In Re: Deckler. That's
` 977 F. Sec. 1449 at 1452 from the
` Federal Circuit in 1992. There, the
` issue was the idea of interference
` estoppel but the concept's the same in
` that case. In a prior interference, the
` Board found that the patent applicant
` was not entitled to the claims and then
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` indistinct claims in a continuation.
` And the Board found that 42.73 in
` Deckler precluded claims and
` continuations that were not patentably
` distinct, so it was addressed once
` before by one panel of the Board.
` But it's really essential under the
` APA Act that the Board -- that the
` Patent Office not issue inconsistent
` rulings. In fact, that's why the APA
` was created as the Federal Circuit
` acknowledged in In Re: Zurko, 142
` F.3rd. 1447 at 1450.
` So since 42.73 provides a mechanism
` for this office to avoid this type of
` APA violation, we believe that it's
` essential that the Board do so here and
` not allow these continuation patents to
` stand; otherwise, we think it would be
` arbitrary and capricious as the, on the
` one hand, the Board -- not only the
` Board but the Federal Circuit has
` invalidated these claims at the same
` time a single examiner has granted them,
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`TSG Reporting - Worldwide 877-702-9580
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`3
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`P. 3
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`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

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`TELEPHONIC CONFERENCE CALL 1/3/2018
` is granting them.
` And recently in an oral argument in
` the case Xitronix Corporation v.
` KLA-Tencor, that's Appeal Number
` 2016-2746, on October 2 of last year, at
` 1731 Judge Moore commented in that case
` where a similar thing happened there
` with a jury verdict, prior jury verdict,
` finding claims invalid. And then in the
` continuation, the patent owner went on
` to get slightly different claims, slight
` change of language. Then on the appeal,
` Judge Moore said how in the world can an
` examiner have the authority to allow
` claims in a continuation patent of
` that -- there's no way the Patent Office
` could be allowed to do that once they'd
` been invalidated.
` Let me address the question of
` whether or not these claims are
` patentably distinct. I think the main
` evidence of that is simply the fact that
` the examiner himself has found the
` claims were not patentably distinct.
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` also add a purity limitation of
` 99.5 percent. Your Honors may remember
` the pending claim in the '393 patent
` having the same limitation that was
` invalidated.
` So the claims are identical. It's
` the exact same treprostinil salt made by
` the exact same process. There were no
` additional process steps added. And
` even if there were, remember that in
` product-by-process claims it's the
` product which is patented, not the
` process steps. Adding additional
` process limitations doesn't change the
` product.
` Also, Your Honors may recall that
` you ruled and the Federal Circuit
` affirmed that all the process steps
` anyway were in the prior art.
` So here's what we're asking for.
` We're asking that the Board recommend to
` the director and the examiner to stop
` these additional continuations to the
` '393 patent that the owner has recently
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` And, in fact, in one case a terminal
` disclaimer was filed. But the only
` things these claims add is -- it's the
` same treprostinil salt as in Claim 9.
` The only limitations that have been
` added is in the preamble, the phrase
` "pharmaceutical batch" instead of
` "product" is used, although apparently
` "batch" encompasses the product since it
` is in dependent Claim 5 that calls for
` the product made from Claim 1.
` Then there's also some inherent
` beneficial results that are added, that
` the compound be stable for storage at
` ambient temperature. Remember, it's the
` same salt as made by the claims here,
` and these are product-by-process claims.
` And also, there are limitations
` that a certain amount of product be
` present. So in Claim 1, it's -- the
` first one is 2.9 grams and in another
` one of their patent applications it's 5
` kilograms, but that's -- the only
` difference is there are some claims that
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` filed which violate the requirement in
` 42.73 that continuations having
` patentably indistinct claims not be
` prosecuted. That kind of arbitrary
` action by a single examiner to allow
` such claims would violate the APA and
` the reasoning in In Re: Deckler
` regarding interference estoppel.
` Why would one really need this?
` Well, it may appear to just say, well,
` why don't you just file more IPRs?
` These patents will be listed in what's
` called the Orange Book, which will give
` Patent Owner United Therapeutics a
` 30-month stay once we try to introduce a
` product. And we are hoping to get our
` NDA on file soon for that product, so
` that will initiate a suit later this
` year. And so having to wait 18 months
` for another IPR is really not going to
` help us when we will have a 30-month
` stay very soon. And this is for a
` product that's going to be essential for
` a patient to take new product, but not a
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`TSG Reporting - Worldwide 877-702-9580
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`4
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`P. 4
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

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`TELEPHONIC CONFERENCE CALL 1/3/2018
` generic, and it will have some
` advantages over United Therapeutics'
` products that will be very important for
` patients.
` Your Honors, do you have any
` questions?
` JUDGE HARLOW: Not at this time,
` Mr. Pollack. Is there anything else
` from Petitioner or shall we move on to
` Patent Owner?
` MR. POLLACK: There's nothing else,
` Your Honor.
` JUDGE HARLOW: Thank you very much.
` Mr. Maebius, would you like to respond
` to Petitioner's position?
` MR. MAEBIUS: Why, yes, Your Honor.
` With respect to the case where a
` terminal disclaimer was filed, I first
` want to point out that the courts have
` held that filing a terminal disclaimer
` does not constitute an admission of
` indistinctness.
` And the second point I'd like to
` make relates to an IPR decision
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` adverse judgment. And the Board has
` held in IPR2014-00346 that "adverse
` judgment" means an unappealable final
` decision which only applies against the
` party's claim has actually been canceled
` and not merely held unpatentable. And
` the Board in that decision was citing to
` the Patent Office comments in the
` Federal Register 77 FR 48612. So in the
` case at hand we are still subject to
` further review by the Supreme Court.
` A related point is that 42.73(d)(3)
` shouldn't be applicable because it also
` uses the language that there has to be
` indistinctness from the claim which has
` been, quote, "finally refused or
` canceled." And there has been no final
` refusal or cancellation until all
` possibility of appeal or further review
` has been exhausted.
` The Board really doesn't have
` jurisdiction at this point to give
` SteadyMed the relief it requests. And
` aside from the purely ministerial acts
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` 2014-01240, Paper Number 22, where the
` Board denied a request for a similar
` motion to suspend continuations. And
` although that involved a pending IPR
` whereas here we already have a final
` written decision, the Board panel in
` that decision denied the request to file
` the motion based on Section 311(b) and
` noted that the scope of an IPR only
` relates to the involved patent and not
` to a family of patents. And the
` statutory language says that an IPR only
` applies to a patent using the singular
` form of "a."
` Also, 42.73(c) wouldn't apply here
` because the judgment that may include
` the recommendation that SteadyMed is
` seeking, the word "judgment" has been
` defined in Rule 42.2 to mean a final
` written decision by a Board. And, of
` course, there already has been a final
` written decision by a Board.
` As to 42.73(d)(3), that also is not
` applicable because it requires an
`
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` of the Patent Office issuing a
` certificate under 42.80, there's really
` nothing left for the Board to do here.
` The final written decision was appealed.
` The Federal Circuit affirmed it but did
` not remand. The mandate of the Court
` issued on December 21 and presumably has
` been received by the PTO.
` I also want to point out that
` SteadyMed previously was warned by the
` PTO when it filed several Rule 182
` petitions in UT's earlier pending
` continuations, and in that decision on
` the petitions, the PTO pointed out that
` 35 USC 122(c) requires that the PTO
` ensure that no protest or other form of
` pre-grant opposition to an application
` be initiated after publication without
` the express written consent of the
` applicant.
` And that decision further warned
` that another inappropriate submissions
` might be referred to OED. And this was
` a decision by OPLA on January 25, 2017
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`TSG Reporting - Worldwide 877-702-9580
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`5
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`P. 5
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

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`TELEPHONIC CONFERENCE CALL 1/3/2018
` but SteadyMed is continuing to pursue
` action against UT's latest continuations
` that clearly is outside the scope of the
` rule.
` Also, another rule, which is Rule
` 42.73(a), has bearing on this case,
` which says that a final written decision
` disposes of all issues that were or by
` motion reasonably could have been raised
` and decided. So the procedures are set
` up in an IPR to allow for notice of
` motions to be filed at a certain point
` in the case and that is prior to the
` issuance of the final written decision.
` Since the final written decision
` has now come out, there's no
` recommendation in there relating to
` 42.73(c). So SteadyMed previously tried
` in this IPR to also invoke the Board's
` authority to take action against UT's
` continuation patents, and this Board
` panel previously refused to do that.
` SteadyMed did not cross-appeal that
` denial in its appeal to the Federal
`
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` occurred in this IPR, including the
` latest decision by the Federal Circuit.
` The PTO is a fee-funded agency and
` SteadyMed is effectively trying to get
` the Board to take over examination of
` the continuations for free.
` Particularly for issued patents,
` SteadyMed should have to pay for further
` IPRs like anybody else.
` So I also want to briefly address
` the merits. I think that opposing
` counsel has oversimplified grossly the
` differences between the claims. And the
` remarks submitted in response to the
` various rejections from the examiner
` highlight the importance of those
` distinctions.
` So first of all, the claims are
` patentably distinct and any decision by
` the examiner that might happen in the
` future to allow those claims would not
` create an inconsistency with the final
` written decision in this IPR and the
` decision to allow those claims just on
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` Circuit.
` With respect to statutory
` authority, I want to further point out
` that the Board doesn't have the
` statutory authority to get involved in
` ex parte prosecution of continuation
` application. With respect to Section
` 315(d), that provision relating to
` parallel proceedings does not extend to
` continuation applications. And, as a
` practical matter, it really wouldn't be
` workable for the Board to be requested
` to review a large number of claims and
` pending continuations and make
` determinations of whether or not
` something is indistinct within the
` meaning of this rule. What SteadyMed is
` asking for would be a huge burden to
` both the patent owner and the Board and
` a stretch of the PTO's resources. It's
` really for the examiner to apply the
` scope of this rule in the ongoing
` examination. The examiner has been made
` aware of all the filings that have
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` the basis of the differences in the
` claims alone.
` On top of that, the patent owner
` has submitted significant evidence and
` also new arguments supporting the
` patentability of those claims that
` wasn't before the Board in the IPR. So
` even if the claims were not distinct,
` their allowance would still not be
` inconsistent with the final written
` decision and therefore wouldn't violate
` Rule 42.73.
` That's the only comments I have,
` unless there are other questions from
` the Board.
` JUDGE HARLOW: Thank you,
` Mr. Maebius. Mr. Pollack, can you
` briefly touch on the point Mr. Maebius
` raised about whether the Board has
` jurisdiction right now?
` MR. POLLACK: Yes. Yeah, let me
` address that. Under Mr. Maebius's
` analysis, 42.73(d)(3) would be a dead
` letter, be absolutely meaningless,
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`TSG Reporting - Worldwide 877-702-9580
`
`6
`
`P. 6
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

`Page 22
`TELEPHONIC CONFERENCE CALL 1/3/2018
` effectively eliminated from the
` regulations despite the comments in
` creating that rule and otherwise to make
` sure that what's happening here did not
` happen, that someone used the
` continuation process to get around a
` board's final written decision and
` appeal.
` Let me make something very clear.
` The issues here are no longer
` appealable. A mandate has issued. It
` is true that, so we always file a cert
` at the Supreme Court, but that's not
` usually considered when the terms
` unappealable are reviewed. So, in fact,
` the certificate can now issue because
` the mandate has issued.
` So the claims are now unappealable.
` The regulation is clear. In fact,
` Mr. Maebius is right. We raised this
` with you at the end of the proceeding
` back in April. And at that time, the
` Board said, look, there's no final
` written decision, can still be appealed
`
`Page 24
`TELEPHONIC CONFERENCE CALL 1/3/2018
` have some meaning. And that's what
` we're asking for is that that
` recommendation be made.
` We're not necessarily saying they
` have jurisdiction over prosecution, but
` some authority should be made to bear on
` this particular examiner that he can't
` simply ignore the Board's decisions and
` come out differently.
` Patent Owner says it can make new
` arguments. That's not how the law
` works. Once a decision, whether by the
` Board, the Federal Circuit, or any other
` Board, is made you do not get to reargue
` and come up with new arguments. There
` really aren't any new arguments, by the
` way. I've read their prosecution. But
` despite that, you can't come up with new
` arguments once you've lost. You don't
` get to do this again.
` We are -- as the Board stated in
` the Smith & Nephew v. Arthrex case that
` I mentioned earlier, the Petitioner is
` entitled to repose in this these
`
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` and therefore, you know, we can't back
` that at this time. So we've now
` returned to you because the final
` written decision has been affirmed and
` this 42.73 must apply at some point.
` And, in fact, the statute explicitly
` authorizes the Board to, you know,
` establish procedures. This is under
` 316(a)(4) in the statute to deal with
` other proceedings that would be affected
` by the IPR.
` This is really no different than
` when the Board uses interference
` estoppel. And that doctrine was created
` as a -- admittedly, more of a common law
` doctrine by the Board. But here, we
` have a regulatory doctrine that's
` authorized by the statute. That's in
` 42.73(d)(3). And so if it didn't apply
` here, then the regulation never applies.
` And the power that's given it is
` explicit. It says that a recommendation
` can be made to the examiner or to the
` director from the Board, so that must
`
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` matters, and that's why in that case
` they issued the adverse judgment rather
` than leaving that alone to make sure
` that the patent owner, as I pointed out,
` couldn't get patentably indistinct claims
` in the prosecution.
` So we have here, you know, the
` final written decision. It has been
` affirmed. It's not appealable. The
` mandate has issued. At this point, THIS
` 42.73(d)(3) does apply, and the examiner
` himself has found the claims to be
` patentably indistinct.
` JUDGE HARLOW: Thank you very much,
` Mr. Pollack. Mr. Maebius, would you
` like to briefly reply to anything that
` Mr. Pollack has said?
` MR. MAEBIUS: Yes, Your Honor. I'd
` like to go back to the point that the --
` that it's really the examiner's job to
` be applying this rule in ex parte
` prosecution, and the examiner is, in
` fact, doing that. It's evidenced by the
` rejections being made over the same
`
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`TSG Reporting - Worldwide 877-702-9580
`
`7
`
`P. 7
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

`Page 27
` TELEPHONIC CONFERENCE CALL 1/3/2018
` C E R T I F I C A T E
`
` I, MARY ANN PAYONK, shorthand reporter
`and notary public for the Commonwealth of
`Virginia, State of New York, District of
`Columbia, California CSR No. 13431, do hereby
`certify that the foregoing is a true, correct
`and full transcript of the proceedings in the
`above-entitled matter. I certify that I am not
`related to any of the parties to this action by
`blood or marriage, and that I am in no way
`interested in the outcome of this matter.
` Given this 4th day of January, 2018.
`
` _______________________________________
` MARY ANN PAYONK, Shorthand Reporter
`
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`TELEPHONIC CONFERENCE CALL 1/3/2018
` prior art that was applied in the IPR.
` So that process is taking place, and the
` examiner is handling that.
` And also, I want to address the
` fact that Rule 42.73(d)(3) requires a
` claim that has actually been canceled.
` This is the PTO's own comments in the
` final rule notice in the Federal
` Register that I cited saying that it
` applies against a party whose claim has
` been, quote, canceled and not merely
` held unpatentable. So for those
` reasons, the relief that SteadyMed is
` requesting shouldn't be granted.
` JUDGE HARLOW: Understood. Thank
` you very much. We appreciate the
` parties' time. We're going to take the
` arguments under advisement and issue an
` order shortly. If there is nothing
` else, this call is adjourned.
` MR. POLLACK: Thank you.
` MR. MAEBIUS: Thank you.
` (Adjourned at 2:27 p.m.)
`
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`TSG Reporting - Worldwide 877-702-9580
`
`8
`
`P. 8
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

`A
`
`ability (1)
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`TSG Reporting - Worldwide 877-702-9580TSG Reporting - Worldwide 877-702-9580
`
`Page 1
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`
`P. 9
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-00006
`
`

`

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`
`P. 10
`
`UT Ex. 2063
`SteadyMed v. United Therapeutics
`IPR2016-