`
` UNITED STATES PATENT AND TRADEMARK OFFICE
`___________________________________________
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________________________________
` DR. REDDY'S LABORATORIES, LTD. AND DR.
` REDDY'S LABORATORIES, INC.,
` Petitioner,
` v.
` MONOSOL RX, LLC,
` Patent Owner.
`
` Case IPR2016-01111
` Patent 8,603,514
`
` Case IPR2016-01112
` Patent 8,017,150
`
` Case IPR2016-01113
` Patent 8,475,832
`___________________________________________
`
` Teleconference
` New York, New York
` August 1, 2016
` 3:01 p.m.
`
` Transcript of Proceedings
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`MonoSol2001-0001
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`Dr. Reddys v. MonoSol
`IPR2016-01111
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`
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`Page 2
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`A P P E A R A N C E S:
`Presiding:
` The Honorable ERICA A. FRANKLIN,
` Administrative Patent Judge
`Attorneys for Petitioner:
` JEFFERY B. ARNOLD, ESQ.
` LESLIE-ANNE MAXWELL, ESQ.
` ANDREW C. RYAN, ESQ.
` Cantor Colburn LLP
` 1180 Peachtree Street, N.E.
` Atlanta, GA 30309
`Attorneys for Patent Owner in Cases
`1111 and 1112:
` HAROLD H. FOX, Ph.D.
` Steptoe & Johnson LLP
` 1330 Connecticut Avenue, N.W.
` Washington, DC 20036
`Attorneys for Patent Owner in Case 1113:
` ANDREA G. REISTER, ESQ.
` Covington & Burling LLP
` 620 Eighth Avenue
` New York, New York 10018-1405
` DUSTIN B. WEEKS, ESQ.
` Troutman Sanders LLP
` 600 Peachtree Street, N.E.
` Suite 5200
` Atlanta, GA 30308
`ALSO PRESENT:
` JUDGE TINA E. HULSE
` JUDGE CHRISTOPHER G. PAULRAJ
` JUDGE TONI R. SCHEINER
` JUDGE ZHENYU YANG
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` HON. FRANKLIN: This is a
` conference call for cases
` IPR2016-0111, 1112 and 1113. With me
` on the call are two other panel judges
` for cases 1111 and 1112, Judges Hulse
` and Paulraj. Also with me on the call
` are two of the panel judges for case
` 1113 Judges Scheiner and Yang. The
` third judge on that panel may join us
` that is Judge Bonita.
` As counsel for the parties
` introduce themselves, we would like to
` confirm that they approve holding this
` joint conference for all three cases
` as the Patent Owner in the 1111 and
` 1112 cases differs from the Patent
` Owner in the 1113 case. Also please
` indicate whether you have arranged for
` a court reporter for this call.
` Petitioner, let's begin with
` you.
` MR. ARNOLD: Did you say
` Petitioner?
` HON. FRANKLIN: That is correct.
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` MR. ARNOLD: This is Jeffery
` Arnold at Cantor Colburn. With me on
` the call is Andrew Ryan and
` Leslie-Anne Maxwell also of Cantor
` Colburn. We represent the
` Petitioners. We approve of the joint
` conference, and we did not arrange for
` a court reporter.
` HON. FRANKLIN: Okay. Thank
` you. And, Patent Owner, we'll start
` with Patent Owner for 1111 and 1112
` cases.
` MR. FOX: Good afternoon. This
` is Harold Fox at Steptoe and Johnson.
` I represent Monosol RX in these
` proceedings, Patent Owner in the 1111
` and 1112 proceeding. I'm alone on
` this call. We approve the joint
` nature of this call, and we do have a
` court reporter on the line for this
` proceeding.
` HON. FRANKLIN: Okay, then, Mr.
` Fox, I will ask you to file a copy of
` the transcript as an exhibit.
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` MR. FOX: Yes, this is a court
` reporter for all three proceedings, so
` we will do that in all three and
` counsel for the 1113 I think will
` confirm that.
` HON. FRANKLIN: Thank you.
` MS. RIESTER: This is Patent
` Owner for the 1113 proceeding for
` Indivior. This is Andrea Reister from
` Covington and also on the line is
` Dustin Weeks. And we will ensure that
` a transcript gets recorded in the 1113
` proceeding and Indivior also consents
` to the joint conference call.
` HON. FRANKLIN: Thank you. So
` my understanding is that the Patent
` Owners have requested this conference,
` so you can decide which of you would
` like to begin.
` MR. FOX: This is Harold Fox. I
` will start. So we requested this
` conference seeking authorization to
` file a motion to obtain discovery on
` issues of a real party in interest in
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` privity. We have raised these issues
` and requested some limited discovery
` from Petitioner and Petitioner's
` counsel and they have not agreed to
` provide that request for discovery.
` And that is what brings us here.
` HON. FRANKLIN: Would you
` describe that discovery?
` MR. FOX: Yes. So specifically
` to put it in context, these two
` patents have encountered petitions
` previously, thus petitions were denied
` as being time barred in the 1111 and
` the 1112 proceedings. Those filings
` were by TEVA as the Petitioner.
` Shortly after the filing of
` these two petitions, there was
` activity in the press and early June
` that explained the Petitioner in this
` proceeding, Dr. Reddy's Laboratories,
` was taking possession of the ANDA of
` the underlying product that is covered
` by these patents. These patents are
` Orange Book listed and are the subject
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` of litigation for the product
` Suboxone.
` So we sought this discovery and
` asked for information relating to the
` timing of that deal as the press
` releases came out, as I said, shortly
` after these petitions were filed. So
` the scope of discovery, obviously,
` relates to the agreements in question,
` not only the final agreement but also
` any other correspondence and
` communications including term sheets
` or letters of intent or things that
` led up to this definitive agreement
` that, you know, happened --
` HON. FRANKLIN: So you are
` speaking in terms of document
` production only or request for
` admissions? Can you describe it
` specifically?
` MR. FOX: We have asked for the
` documents at this point. We asked for
` some other information. We initially
` asked to confirm that Dr. Reddy's was
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` seeking to obtain the property
` interest in the ANDA Suboxone which
` underlies this proceeding and that
` ANDA is owned by TEVA. The
` Petitioners denied confirming that,
` but we found in a FTC notice that was
` issued on July 27th of this year that
` indeed that as confirmed in the public
` record Dr. Reddy's is obtaining this
` ANDA in question from TEVA.
` And so, we are seeking documents
` to help us understand the timing of
` the deal because we believe that is
` germane to the time bar that may have
` already passed in this case.
` HON. FRANKLIN: And, for
` example, in your request for
` production did you list a certain
` number of categories or did you just
` request one category of documents and
` how and were any documents submitted
` to you in response or just double
` negative?
` MR. FOX: A full negative was
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` received but specifically we asked for
` four categories of documents. One was
` the definitive agreement that is
` referenced in the press release. The
` second is any correspondence or
` communications relating to those
` agreements such as term sheets and the
` like. And the other is the third
` category are correspondence,
` communications between the Petitioners
` and the prior Petitioner and its
` counsel. And the final is information
` about discussions relating to the
` Suboxone and us specifically. So any
` other conversations or exchanges of
` information that happened between TEVA
` and Dr. Reddy's relating to this
` product that is central to this case.
` HON. FRANKLIN: So in terms of
` RPI and privity, are you saying that
` your basis for believing that
` Petitioner has not disclosed or named,
` for example, all the real parties is
` based on the press release and the FTC
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` notice?
` MR. FOX: Yes, that is the
` documentary evidence we have of the
` deal right now, and we are seeking
` additional information about the
` timing of agreement in principle.
` HON. FRANKLIN: Okay. So just
` based on those two and nothing else?
` I just want to make sure I understand
` it completely.
` MR. FOX: Yes. There were a
` couple of articles that were published
` on and around early June based on
` press releases from Dr. Reddy's and
` subsequently late last week, we
` learned of this notification from the
` Federal Trade Commission resolving a
` dispute about dispensing or
` distributing out some of the
` properties of TEVA based on a
` different acquisition. And in that
` list of properties that were going to
` be divested to other entities, it
` confirmed that Suboxone was going to
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` Dr. Reddy. And so we specifically
` asked for information involved in that
` transaction.
` HON. FRANKLIN: And let me ask
` when this request was made?
` MR. FOX: Our specific request
` or initial request was made in a
` telephone call -- Andrea, do you have
` the date, July 6th?
` MS. REISTER: Yes. And then we
` did a follow-up communication.
` MR. FOX: On July 14th for a
` more specific request.
` MS. REISTER: Correct.
` HON. FRANKLIN: Is there
` anything else you wanted to mention?
` MR. FOX: I didn't have
` anything.
` Andrea, do you?
` MS. REISTER: This is Andrea
` Reister for the Patent Owner in the
` 1113 proceeding. That patent is
` basically the subject of the same fact
` pattern. There was a petition in
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` there filed by TEVA that was
` substantively denied, but other than
` that difference, I think the facts are
` basically the same as Mr. Fox has
` explained for the 1111 and 1112
` proceeding.
` HON. FRANKLIN: Okay. And let
` me go back and ask regarding the press
` release, what was the date of that?
` MR. FOX: The press release that
` we had a copy of was a June 11th press
` release and it was a press release
` announcing the definitive agreement
` between entities. So we believe
` there's a high likelihood that the
` conversation about this property had
` been ongoing for some time before that
` definitive agreement.
` HON. FRANKLIN: Okay, I
` understand. And if there's nothing
` more that you want to add now, I just
` want to confirm you are seeking
` document production, you are not
` seeking depositions or other
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` discovery; is that correct?
` MR. FOX: That's correct.
` HON. FRANKLIN: Okay.
` And, Petitioner, how do you
` respond?
` MR. ARNOLD: We would like to
` address the timeline provided with
` relevant information we previously
` provided Patent Owners. We will
` provide some additional information in
` this call that was requested with
` Patent Owners and to address the
` agreement and issue, and lastly, a
` case called Synopsis versus Mentor
` Graphics which is a recent federal
` circuit opinion relevant to the
` incident discussion.
` The three IPRs were filed on 31,
` May 2016. At the time the petitions
` were filed, the Petitioners were not
` time barred under Section 315b. On
` June 11, 2016, Dr. Reddy's issued a
` press release discussing agreement
` between Dr. Reddy's and TEVA
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` Pharmaceuticals Industries Limited and
` Allergan PLC. Allergan was Actavis.
` They had a name change or an
` acquisition. And the press release in
` pertinent part reads as follows:
` "Dr. Reddy's Laboratories has
` entered into a definitive agreement
` with TEVA Pharmaceuticals Industries
` Limited, an affiliate of Allergan PLC,
` to acquire a portfolio of eight
` abbreviated new drug applications in
` the U.S. for 350 million in cash at
` closing." At closing is an important
` part here. "The acquired portfolio
` consists of products that are being
` divested by TEVA as a precondition to
` its closing of the acquisition of
` Allergan's generic business. The
` acquisition of these ANDAs is also
` contingent upon the closing of the
` TEVA Allergan's generics transaction
` and approval by the U.S. Federal Trade
` Commission of Dr. Reddy's as buyer."
` The press release did not identify any
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` of the ANDAs or associate
` pharmaceuticals. It wasn't until
` today that we had knowledge, until
` just a few moments ago, we had
` knowledge that the FTC has indicated
` that the Suboxone in hand is a part of
` the deal, but as I will explain later,
` I still can't comment on that. It's
` dealing with confidentiality.
` So as I said, the press release
` does not identify any of the ANDAs or
` associated pharmaceuticals. To our
` knowledge, the TEVA Allergan closing
` has not occurred. We believe that
` Patent Owners can independently verify
` this for themselves. The FTC's
` approval for Dr. Reddy's acquisition
` of the ANDAs alluded to in the press
` release has not yet occurred. Patent
` Owners can again since they are aware
` of the FTC work, they can
` independently confirm this fact with
` the FTC.
` The TEVA Dr. Reddy's closing has
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` not occurred. More to the point, the
` TEVA Dr. Reddy's closing had not
` occurred prior to or on May 31, 2016
` the following day of the petitions.
` What originally started with this was
` the articles that were referenced
` before in which according to analysts
` at least two of the products that
` Dr. Reddy's required included the
` Suboxone and ANDA, but this was
` speculation on their part. And so as
` a result, they are further speculating
` that TEVA has a real party interest in
` the subject petitions or that privity
` exists between Petitioners and TEVA on
` or before May 31, 2016.
` So Dr. Reddy's press release
` itself confirms that only Petitioners
` are the real party in interest and no
` privity existed at the time the
` Petitions were filed. There is
` closing, no acquisition, no control,
` no privity. And I will also note that
` Patent Owners are currently in
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` litigation with TEVA Allergan and have
` the ability to obtain discovery from
` those defendants on this matter.
` Information previously provided
` to Patent Owners. So as indicated
` before, there was a telephone
` conference on 6, July 2016 between
` counsel for Petitioners and Patent
` Owners. A subsequent e-mail was sent
` to the Patent Owners' representatives
` on 11, July 2016 recapping the
` conference. I spoke on behalf of the
` Petitioners. And during the telephone
` conference which was supplemented by
` the e-mail the following statements
` representations were made:
` I was without authority to
` confirm or deny the agreement between
` TEVA Petitioners including a TEVA
` and/or Allergan Suboxone related ANDA.
` And I will explain in a few minutes I
` remain without such authority. The
` following information was provided to
` the Patent Owners. At the time the
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` respective complaints against TEVA and
` Allergan were filed, Petitioners were
` neither a real party in interest nor
` had any control over such litigation.
` For verification I suggest the
` Patent Owners review the respective
` Suboxone litigation dockets for
` mandatory disclosures of real parties
` in interest. No document exists
` identifying Petitioners as a real
` party in interest. Patent Owners were
` informed at the time the three IPR
` petitions were filed.
` HON. FRANKLIN: I want to stop
` you there. I'm listening intently to
` everything you are saying, but I want
` you to repeat that last statement
` regarding no documents indicating.
` MR. ARNOLD: That is correct.
` In district court you are required to
` file mandatory disclosures identifying
` the real parties in interest, parties
` who have an interest in the
` litigation. There is no such document
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` in any court in any district
` identifying Dr. Reddy's as a party
` having interest in the Suboxone
` litigation.
` HON. FRANKLIN: So you are not
` saying there are not documents that
` could indicate?
` MR. ARNOLD: I am saying there
` are no documents period that would
` indicate Dr. Reddy's as a party in
` interest of the Suboxone in
` litigation.
` HON. FRANKLIN: Okay. You can
` continue.
` MR. ARNOLD: So the Patent
` Owners were also informed at the time
` the three IPR petitions were filed
` there was no privity between TEVA
` and/or Allergan or controlled by
` Dr. Reddy's over Suboxone and the
` litigation in which TEVA and Allergan
` are respective defendants. As of
` today this remains unchanged.
` Patent Owners were informed that
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` at the time the three IPR petitions
` were filed there was no agreement of
` income between TEVA and/or Allergan
` and Petitioner for prospective TEVA
` and/or Allergan's respect to Suboxone
` ANDA. At the filing time there was no
` communication between TEVA and
` Allergan or their respective counsel
` and Petitioners or Cantor Colburn
` regarding Petitioner's three IPR
` petitions prior to filing. And in
` fact as of this date, there has not
` been any communications whatsoever
` regarding the IPRs between Patent
` Owners or their representatives and
` TEVA or their representatives or
` Allergan and their representatives.
` There's been no communication
` whatsoever regarding the IPRs.
` TEVA has no interest in or
` control over the respective IPRs
` petitions by Petitioners. And for
` verification, we are going to refer
` again to the statement of real parties
`
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` in interest in all three petitions.
` Only Dr. Reddy's Laboratories Inc. and
` Limited are identified as real parties
` in interest and that is because they
` are the only real parties in interest.
` We were asked if TEVA was funding any
` of the IPRs. Petitioners are self
` funding of the subject IPRs. Neither
` TEVA nor Allergan are obligated to
` fund the subject IPRs on behalf of
` Petitioners. And again, we refer back
` to the identification of the real
` parties in interest in the respective
` petition.
` HON. FRANKLIN: And I just want
` to interrupt again to confirm my
` understanding is the facts that you
` are going through here now were
` provided in writing to the Patent's
` Owner's counsel?
` MR. ARNOLD: That is correct.
` HON. FRANKLIN: Okay. You can
` continue.
` MR. ARNOLD: TEVA provided no
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` guidance on the preparation and filing
` of Petitioner's IPR petitions. We
` were aware of the three failed IPR
` petitions, but that was public record,
` but we did not communicate in any form
` or fashion regarding it. My belief is
` TEVA if they are even aware that we
` filed the three IPRs would have been
` surprised completely that it was done.
` The subject IPR petitions are directed
` solely by Petitioners nor are the
` parties involved with the Petitioners.
` Related to the aforementioned
` communications on the 27, June 2016,
` Patent Owners representative requested
` "the name and contact information for
` the appropriate Dr. Reddy's in-house
` counsel to whom Indivior's PC, Javier
` Rodriguez can direct settlement
` communications." On the next day
` Patent Owners were provided with the
` requested information.
` On 29, June 2016, Mr. Rodriguez
` e-mailed Dr. Reddy's in-house counsel
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` requesting the date and time "to
` discuss ongoing ANDA litigation." On
` 30, June 2016 via e-mail Dr. Reddy's
` in-house counsel responded, and DRL is
` the abbreviation for Dr. Reddy's.
` "DRL is not involved in the Suboxone
` litigation at this time. At this time
` DRL is not a real party in interest
` and nor has any control over the
` current litigation between Indivior
` and/or any defendants regarding
` Suboxone." And we believe that Patent
` Owner has these communications because
` they were sent to their client. So
` there were additional information
` requests about Patent Owners which was
` mentioned a moment ago on 14, July
` 2016 Patent Owners requested discovery
` for Petitioners on the following,
` parts of which will be addressed now.
` One, they want the definitive
` agreement referenced in Petitioner's
` June 11, 2016 press release any drafts
` to the agreement, any term sheets or
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` letter of intent related to the
` agreement and any common interest or
` other agreement related to the
` agreement. So our response to that is
` drafts and agreement are not relevant
` for establishing privity or control
` rather such drafts prove a lack of
` privity and control. This is a
` classic contract law issue negotiation
` shows offer, counteroffer but no
` acceptance necessary to form a
` contract.
` Regarding term sheets our
` response is that there are no
` documents responsive to the request
` regarding a letter of intent related
` to the agreement. Our response is
` there are no documents responsive to
` the request regarding any common
` interest or other agreement related to
` the TEVA Dr. Reddy's agreement. Our
` response is there are no documents
` responsive to the request. They've
` asked for correspondence or
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` communications related to the
` agreement to term sheets identified
` category one which don't exist or B,
` the Suboxone related ANDAs. And we
` respond correspondence or
` communication related to the agreement
` of the Suboxone related ANDAs are not
` related to show privity or control.
` HON. FRANKLIN: If you could put
` a mark there in your notes, I'm going
` to stop you for a moment, but I want
` to stop and talk to Patent Owners for
` a moment. And what I would like to
` talk about is it sounds as though the
` Petitioner is reading their responses
` to requests that you have already
` submitted. So I'm a little confused
` where we are in this process because
` you are asking us to submit discovery
` requests. It sounds like that was
` already done and it sounds as though
` Patent Owners has responded. Can you
` clarify this for me?
` MR. FOX: This is Harold Fox.
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` The responses that counsel for
` Petitioner was just reading with
` respect to the existence or
` nonexistence of agreements in the
` requested categories, these answers
` are being provided for the first time
` today, at least I have not seen them
` in writing.
` HON. FRANKLIN: So you did not
` receive the responses in writing?
` MR. FOX: Not that these
` documents did not exist.
` HON. FRANKLIN: Okay. Let me
` stop you there then and go back to Mr.
` Arnold.
` MR. ARNOLD: Yes, Judge.
` HON. FRANKLIN: So the responses
` that you are reading now were not
` provided yet in writing to Patent
` Owner's counsel?
` MR. ARNOLD: That is correct.
` We are happy to do so.
` HON. FRANKLIN: Okay because
` what we don't want this to do is to
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` turn into an oral argument.
` MR. ARNOLD: Sure.
` HON. FRANKLIN: What we're
` assessing here is whether to allow a
` motion to be filed for discovery. So
` I will let you finish your
` presentation but just in keep in mind
` this not oral argument.
` MR. ARNOLD: Understood. And
` Mr. Fox is correct we had not
` responded to his requests, but we will
` send a response in writing to them on
` these issues. And finally, let's
` see --
` HON. FRANKLIN: Well, my
` question then for you is, and I
` apologize for interrupting your
` thought again, if you plan to respond
` to those requests why was your -- why
` did Patent Owner's counsel earlier
` characterize you as not willing to
` respond?
` MR. ARNOLD: I can't answer that
` question.
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` HON. FRANKLIN: Mr. Fox?
` MR. FOX: Because we had not
` received a response until the one you
` just heard.
` HON. FRANKLIN: It sounds like
` there was room for more meeting and
` conferring prior to involving us, but
` at this point, I think we have heard
` enough. I'm going to give each
` counsel an opportunity to state some
` final remarks and then what we will do
` the separate panels, we will meet and
` issue an order in the next day or so
` indicating whether the motion is
` authorized; okay? I interrupted I
` believe Mr. Fox, were you speaking or
` was it Mr. Arnold?
` MR. ARNOLD: Arnold.
` HON. FRANKLIN: Mr. Arnold,
` would you like to briefly conclude?
` MR. ARNOLD: Sure. Thank you,
` Your Honor. There was one important
` part was because of the
` confidentiality provisions in the
`
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` agreement between TEVA and
` Dr. Reddy's, I could not, I cannot
` release any information that is
` contained in the agreement itself, and
` this agreement is highly confidential
` and contains extremely sensitive
` information about eight different
` ANDAs. This would require heavy
` redaction.
` There will be in support of our
` response if this motion is granted,
` there will be an affidavit on the part
` of Petitioner which again opens up for
` additional discovery and depositions.
` Also importantly is this really is
` just all speculation. The dates don't
` add up and if you look at Synopsis
` Inc. versus Mentor Graphics 814 F.3d
` 1309 which is a Fed circuit case from
` 2016 based on IPR 2012-00042, Mentor
` filed a writ of mandamus seeking
` discovery on this issue. And the
` question before the federal circuit
` was this privity at the time of this
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` IPR institution but not at time of
` complaint filing or petition filing
` triggered the time bar of 1315b? And
` the answer to that is no.
` And then the Synopsis case there
` was actually an agreement before the
` petition was filed. So the closing
` didn't occur until after the petition
` was filed, and there the federal
` circuit and the board both said that a
` time bar was not applicable, that you
` look at whether there was litigation
` control at the time that the complaint
` was filed, was the Petitioner in
` privity or in control of the
` litigation. And in our case the
` answer is no. And then you look at
` whether or not at the time the
` petition was file