Telephone Conference Call - May 28, 2020
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`Page 1
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
` __________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` __________
`
` AYLA PHARMA LLC
`
` Petitioner,
`
` v.
`
` ALCON RESEARCH LLC
`
` Patent Owner.
`
` __________
`
` Case IPR2020-0295
` Patent No. 9,533,053
`
` __________
`
` TELEPHONE CONFERENCE CALL
`
` May 28, 2020
`
` 3:00 p.m.
`
`GregoryEdwards, LLC | Worldwide Court Reporting
`GregoryEdwards.com | 866-4Team GE
`
`
`
`Page 1
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
` __________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` __________
`
` AYLA PHARMA LLC
`
` Petitioner,
`
` v.
`
` ALCON RESEARCH LLC
`
` Patent Owner.
`
` __________
`
` Case IPR2020-0295
` Patent No. 9,533,053
`
` __________
`
` TELEPHONE CONFERENCE CALL
`
` May 28, 2020
`
` 3:00 p.m.
`
`GregoryEdwards, LLC | Worldwide Court Reporting
`GregoryEdwards.com | 866-4Team GE
`
`
`
`Telephone Conference Call - May 28, 2020
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`Page 2
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` A P P E A R A N C E S
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` (all appearances telephonically)
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`PRESIDING:
`
` CHRISTOPHER M. KAISER, Administrative
`
` Patent Judge
`
` GRACE K. OBERMANN, Administrative
`
` Patent Judge
`
` JAMIE T. WISZ, Administrative
`
` Patent Judge
`
`ON BEHALF OF PETITIONER AYLA PHARMA LLC:
`
` JITENDRA MALIK, PhD
`
` Katten Muchin Rosenman LLP
`
` 550 South Tryon Street
`
` Suite 2900
`
` Charlotte, North Carolina 28202-4213
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` 704-444-2000 (P) 704-444-2050 (F)
`
` jitty.malik@katten.com
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`Telephone Conference Call - May 28, 2020
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`Page 3
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`APPEARANCES: (continued)
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`ON BEHALF OF PATENT OWNER ALCON RESEARCH LLC:
`
` ANDREW TRASK, ESQUIRE
`
` CHRISTOPHER J. MANDERNACH, ESQUIRE
`
` Williams & Connolly LLP
`
` 725 Twelfth Street, N.W.
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` Washington, D.C. 20005
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` 202-434-5000 (P) 202-434-5029 (F)
`
` atrask@wc.com cmandernach@wc.com
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`ALSO PRESENT:
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` Peter Waibel, Esq.
`
` Novartis
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` Scott Chapple, Esq.
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` Alcon Research LLC
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`REPORTED BY:
`
` Cappy Hallock, RPR, CRR
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`Telephone Conference Call - May 28, 2020
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` P R O C E E D I N G S
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` - - - - - -
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` THE COURT: Good afternoon. This is a
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`conference call in IPR2020-00295. I'm Judge
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`Kaiser. On the line with me also I have got
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`Judges Obermann and Wisz.
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` Can we do a roll call of anyone who is
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`here? Let's start with Petitioner, please.
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` MR. MALIK: Thank you, Your Honor.
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`This is Jitendra Malik, lead counsel for
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`Petitioner.
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` THE COURT: Okay. Anyone else on for
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`Petitioner?
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` MR. MALIK: Nope. Just me, Your
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`Honor.
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` THE COURT: Okay, and anybody on for
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`Patent Owner?
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` MR. TRASK: Good afternoon, Your
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`Honor. This is Andrew Trask with Williams &
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`Connolly for Patent Owner, and I have a few people
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`on the line with me. I have my two co-counsel,
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`Peter Waibel and Scott Chapple, both of Novartis,
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`Telephone Conference Call - May 28, 2020
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`as well as my colleague, Chris Mandernach, from
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`Williams & Connolly.
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` THE COURT: All right, thank you
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`everybody for being here. Is there a court
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`reporter on the line by any chance?
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` THE REPORTER: Yes, Your Honor.
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` THE COURT: I'm not sure which party
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`asked for the court reporter, but if you wouldn't
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`mind filing the transcript of the call as an
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`exhibit in this case we would appreciate it.
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` MR. MALIK: Petitioner will do so.
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`Petitioner secured the court reporter, Your Honor.
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`We will take care of that.
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` THE COURT: Okay.
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` All right, so I guess it was a joint
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`request but the e-mail came from Petitioner. So
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`Petitioner, I guess I will give you a chance to
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`speak first.
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` MR. MALIK: Sure. Thank you everyone
`
`for your time.
`
` Petitioner is seeking permission from
`
`the panel to submit a short 12-page reply to
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`Telephone Conference Call - May 28, 2020
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`Patent Owner's preliminary response. As the panel
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`is aware, Patent Owner's preliminary response is
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`62 pages and exclusively dedicated to raising
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`issues germane to 325(d) and 314(a). Like any
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`other Petitioner, we had to spend pretty much all
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`of our space focusing on the invalidity argument
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`that we need to advance. Certainly we didn't have
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`anywhere near the page space such as 62 pages.
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` In addition, Patent Owner relies
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`heavily on two recently designated opinions,
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`precedentially designated opinions in this case,
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`Advanced Bionics and Apple. Given neither of
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`these opinions have even been issued by the
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`respective panels, let alone been designated
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`precendential when Ayla filed the petition, we
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`think that good cause exists to allow Ayla to
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`address 325(d) and 314(a) issues in a reply.
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` Ayla's request is very similar to
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`other panels where they have allowed similar
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`requests solely to address 325(d) and 314(a)
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`issues, particularly when the Patent Owner brings
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`the issues so we know exactly what to respond to.
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`Telephone Conference Call - May 28, 2020
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`Page 7
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`Just giving three examples, IPR2019-400, ten pages
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`were allowed for a reply with a four-page
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`surreply. In addition, another IPR2019-1095, ten
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`pages for a reply, five pages for a surreply.
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`Another example is IPR2019-207, again ten pages
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`for a reply, four pages for a surreply.
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` In this case, given the length of PORP
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`which is 64 pages, which is much longer than the
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`other, the three IPRs that I gave, which happen to
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`be between 40 to 11 pages in response as opposed
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`to 64, we are asking for 12 pages as opposed to 10
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`pages.
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` In addition, to the extent the board
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`is inclined to grant our request, Petitioner asks
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`that it be granted two weeks to submit its reply.
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` THE COURT: Okay. Thank you,
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`Mr. Malik. We may come back to you in a minute
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`with questions, but let me let Mr. Trask speak.
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` Any opposition to that plan, and if so
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`what would you suggest instead?
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` MR. TRASK: Thank you, Your Honor.
`
` So Patent Owner does oppose this
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`Telephone Conference Call - May 28, 2020
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`Page 8
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`request and we do so for the following reasons.
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`As the board is obviously well aware, the standard
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`for seeking a reply under the board's rules is
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`good cause, and Patent Owner doesn't see any basis
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`on which Petitioner can contend there is good
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`cause for a response here.
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` The board has recognized in its
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`decisions on this issue there are basically two
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`bases on which good cause can rest. The first is
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`new facts that arise in a Patent Owner response
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`that couldn't have been anticipated by the
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`Petitioner, and the second is new legal arguments
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`that are not reasonably anticipated by the
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`Petitioner. Neither of those situations applies
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`here.
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` With respect to the facts, the bases
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`on which Patent Owner rested its 314 and 325(d)
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`arguments were bases that were indisputably
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`well-known to Petitioner at the time the petition
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`was filed. So the first of the three principal
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`documents relied on by Patent Owner was a district
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`court decision that was issued two years before
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`Telephone Conference Call - May 28, 2020
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`Page 9
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`the petition was filed. It involves all the same
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`references that are at issue in Ayla's petition.
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`It involves many of the same arguments and similar
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`and in some instances identical claims that are at
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`issue here.
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` The district court made numerous
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`factual findings that are highly relevant to the
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`arguments that are raised in Ayla's petition. And
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`that district court decision, Your Honors, was not
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`only known to Ayla at the time of filing its
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`petition but it was included as an exhibit to its
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`petition, that is Exhibit 1030 to Ayla's petition,
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`and it was discussed at some length in Ayla's
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`petition, including at Pages 62 to 64 of that
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`petition. So with respect to that document there
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`is no surprise here and there is no fact that
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`could not have been reasonably anticipated by
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`Petitioner.
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` The second document is a prior IPR
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`petition filed by a company called Argentum four
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`years before Ayla filed its petition, again all
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`the same references as in Ayla's petition. Two
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`Telephone Conference Call - May 28, 2020
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`out of the three grounds were the same as in
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`Ayla's petition. Many of the same arguments,
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`oftentimes word for word, is found in Ayla's
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`petition. That Argentum IPR petition was
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`submitted to the examiner during prosecution,
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`considered by the examiner, and is printed on the
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`face of the challenge patent in this case. And
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`then the Argentum petition furthermore was also
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`attached to Ayla's petition as an exhibit, Exhibit
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`1021, and it was cited and discussed in its
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`petition, including on the very first page of
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`Ayla's petition. And so again this is a fact that
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`was not a surprise to Ayla at the time it filed
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`its petition.
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` And then finally there was the third
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`and final principal basis for Patent Owner's
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`arguments under 314 and 325 is the examiner's
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`consideration of one of Ayla's references, which
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`is the Schneider reference, and that was also
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`known to the Petitioner. It was discussed. The
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`examiner's consideration of that reference was
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`discussed on Page 39 of Ayla's petition, and in
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`Telephone Conference Call - May 28, 2020
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`particular in the context of 325(d).
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` So with respect to the first of the
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`two bases that can form the grounds for good
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`cause, there are no facts that could not have been
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`reasonably anticipated by Ayla at the time it
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`filed its petition.
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` With respect to any new legal
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`arguments, there is no good cause on that basis
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`either. 314 and 325(d) are, of course, well-known
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`bases for responding in Patent Owner preliminary
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`responses, and they were fully anticipated by Ayla
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`here. Ayla itself referenced 325(d) in its
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`petition on Page 39. It had made the argument
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`that the examiner's consideration of the Schneider
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`reference should not be a basis for denying 325(d)
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`so Ayla clearly anticipated that 325(d) argument.
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` And with respect to 314, at Pages 62
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`to 64 of the petition Ayla also addressed the
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`point about the district court decision and
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`anticipated Patent Owner's responses there. At
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`Page 62 Ayla argued, quote, "Patent Owner will no
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`doubt point to the district court's finding that
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`Telephone Conference Call - May 28, 2020
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`the parent '154 patent was not invalid and in an
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`attempt to dissuade the PTAB from instituting
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`review of the '053 patent," unquote, so that
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`clearly this argument was anticipated by Ayla.
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` So listening to Ayla's arguments here,
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`and also in the correspondence between the parties
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`prior to this hearing before Your Honors there are
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`really two principal arguments Ayla is making
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`here, the first of which is that it simply wants
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`more space to devote to these arguments, and that
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`is not a proper basis for a finding of good cause.
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`And the board has found exactly that in the
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`Instrumentation Laboratory versus HemoSonics case.
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`This is IPR2018-00264, Paper 7. The board found
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`that especially considering Petitioner's
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`acknowledgment that its decision not to address
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`General Plastics was based at least in part on
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`space constraints, there was no good cause for a
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`reply in this case.
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` Similar in the Mylan versus Sanofi
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`case, this is IPR2017-01526, Paper 9, where a good
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`cause was not found for a reply where Petitioners
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`Telephone Conference Call - May 28, 2020
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`Page 13
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`simply sought to revisit or elaborate on
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`previously raised points. So simply wishing that
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`there had been more pages under the board's rules
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`for its petition and seeking those additional
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`pages by way of a reply is, under the board's
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`decisions, not good cause.
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` And then the other decision that
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`Petitioner, the other argument that Petitioner
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`raises is this question of the issuance of the
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`Apple and Advanced Bionics decisions, and there is
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`no dispute here that those decisions both issued
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`after the petition was filed, but what Ayla
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`doesn't acknowledge here is that those decisions
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`are, of course, based on prior precedent of the
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`court.
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` The Apple decision is based on the NHK
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`Spring precedential decision, and the Advanced
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`Bionics decision is based squarely on the Becton
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`Dickinson factors. And despite citing over 30
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`different cases in its petition, Ayla not once
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`cited the NHK or the Becton Dickinson cases, and
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`in fact opted not to argue that the board's
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`Telephone Conference Call - May 28, 2020
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`Page 14
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`precedence supports its position under 314 and
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`325.
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` And then so what we have here is a
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`case where Ayla is seeking to leverage the
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`issuance of new board precedent in order to argue
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`a legal point based on board precedent that it
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`didn't argue the first time around. And there is
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`board -- there have been board decisions on that
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`point as well indicating that that is not a basis
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`for good cause.
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` So as recently as March of this year,
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`this is the decision of Unified Patents versus
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`Velos Media. This is IPR2019-1663, Paper 8. This
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`is a case where the Petitioner sought a reply
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`based on the newly issued Hulu versus Sound View
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`decision of the precendential opinion panel, but
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`what the board recognized and what the Patent
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`Owner pointed out is what Petitioner really wanted
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`there was a chance to argue the prior Samsung
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`versus Infobridge case that had been cited by the
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`Fifth Circuit in late 2019. But the Samsung case
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`had issued prior to the petition and the board
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`Telephone Conference Call - May 28, 2020
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`Page 15
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`found that there is not good cause for briefing on
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`the Hulu case because Samsung was decided before
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`the petition and Petitioner was aware of that. So
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`simply if it wasn't proper to use a later issued
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`precendential decision as a hook to argue prior
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`precedent that the Petitioner had passed the first
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`time around.
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` Then the final decision that supports
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`the same point, Your Honors, is the Intex versus
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`Team Worldwide case. This is IPR2018-00870, Paper
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`9, and here the Petitioner sought leave to file a
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`reply to address two recent issued federal circuit
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`decisions, but the board refused to grant leave
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`for the reply finding that the two federal circuit
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`decisions simply were the most recent additions to
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`the already developed body of law on this issue.
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` And I submit, Your Honors, that is
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`effectively what we have here. The Apple and the
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`Advanced Bionics decisions are simply additions to
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`a developed body of law and body of precedent of
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`the board under the NHK and Becton Dickinson line
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`of cases, and having passed upon the opportunity
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`Telephone Conference Call - May 28, 2020
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`Page 16
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`to rely upon that body of law in its petition it
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`shouldn't now have good cause to do so simply by
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`virtue of the issuance of two new precedential
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`decisions.
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` And finally, Your Honors, although we
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`don't think good cause exists here, and we think
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`that Petitioner's request should be denied, if the
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`board is inclined to grant a reply we do
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`respectfully request a surreply of the same
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`length.
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` THE COURT: Okay. A couple of
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`questions.
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` One is I wonder about the relative
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`novelty of some of the arguments that are made in
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`the preliminary response. I understand that
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`314(a) and 325(d) arguments are pretty typical and
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`there is a reasonable argument to be made that
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`those at this point should be anticipated by
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`Petitioners, but here at least the 314(a)
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`argument -- and I apologize, I'm not as familiar
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`with it at this point as I probably will become at
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`some point -- it seems like it is based on a
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`district court decision on a not for challenge
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`patent but a related patent, and I wonder, I don't
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`think I have come across that situation before. I
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`don't know if the other members of the panel have
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`but, Mr. Trask, maybe I will ask you, has that
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`situation come up before in any AIA trial
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`proceeding before the board?
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` MR. TRASK: So I don't know if this
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`situation squarely has come up before, Your Honor,
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`but it certainly has been contemplated by board
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`precedent, and we cite a number of cases in our
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`preliminary response where the board acknowledges
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`that if -- for example, there has been a prior
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`proceeding on the same or related patent that is
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`relevant to the question of denial under 314. So
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`it's I think contemplated by the board's
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`precedent, though I can't point you to a case that
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`kind of squarely addresses the same factual
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`scenario.
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` I will point out as well, this is not
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`a case where this is kind of a, you know, happens
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`to be a related patent but claims very different
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`subject matter, and I understand Your Honor won't
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`have yet had the time to dig into all the details
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`of the filings, but you will see when you do that
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`many of the claim limitations between the two
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`patents are identical word for word. These are
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`highly similar claims, and for that reason it
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`was -- it's not surprising that Ayla in fact
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`addressed this, the district court decision
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`directly in its petition over several pages under
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`a heading on Page 62 that says, quote, "The
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`district court's decision not to invalidate the
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`'154 patent" -- that's the parent patent --
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`"should not dissuade the PTAB from instituting
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`review," unquote. So this is an argument that was
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`squarely anticipated by Ayla and addressed by Ayla
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`over several pages in its petition.
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` Of the many, many highly relevant
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`factual findings in the district court, all but
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`one of them was ignored by Ayla, but one of them
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`was addressed and that was the factual finding
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`with respect to the Yenny reference. This was
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`addressed at Pages 25 to 26 of Ayla's petition,
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`and there they at least made a facial attempt to
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`grapple with the district court's finding and
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`explain why it was wrong.
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` But underlying our petition is the
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`point, Your Honor, that in order for the board to
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`find that there is a reasonably likelihood of
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`success of Ayla's petition it effectively has to
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`find that the district court's many factual
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`findings were wrong. I think in requesting a
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`reply here Ayla recognizes that, and what they are
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`asking for is a chance to address a number of the
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`factual findings that it had declined to address
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`in their petition.
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` If that was a mistake or something
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`that they couldn't reasonably anticipate, I think
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`we would have a different situation here, but
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`plainly they addressed the district court
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`decision, they addressed at least one of the
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`district court's factual findings squarely, so
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`this was a conscious decision by Ayla not to
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`address these many factual findings on the similar
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`related patent at issue under the district court
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`decisions.
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` So I think under those circumstances,
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`number one, this is not too different from a case
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`where there are many claims from the same patent
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`at issue in a prior decision or different claims
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`from the same patent, but it is also not a case
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`where there would be good cause for a reply.
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` THE COURT: Okay, thank you.
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` Mr. Malik, I will turn it back over to
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`you. Let me ask, let me preface it with a
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`question, which is what do you do with the fact
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`that, you know, fairly clearly you did anticipate
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`this argument being raised by Patent Owner and
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`didn't address it in your petition in detail and
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`now want to do it now that it has been raised --
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` MR. MALIK: Well, Your Honor --
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` THE COURT: -- point, too, does that
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`make that a reasonable course of action here?
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` MR. MALIK: Sure.
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` Patent Owner said it himself, our
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`petition is 64 pages. He said it a couple times
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`citing the pages. We did our best to address
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`these things within the space allotted. We didn't
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`anticipate a 65-page PORP solely dedicated to just
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`314, 325. And so we are not trying to raise new
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`arguments. We are going to respond directly to
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`what they stated in their PORP.
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` This is not a question where we didn't
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`make the effort. We took whatever space we had
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`and we used it. I mean, obviously, as Your Honor
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`knows, we do have to spend a significant amount of
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`time dealing with the prima facie case, but
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`getting a 65-page, 64-page response just on these
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`issues, I do think given the page discrepancies
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`good cause does (sound garbled) Patent Owner
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`doesn't have to spend anything at this time to
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`respond to the actual prima facie case. They can
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`rely on other issues, procedural issues. That's
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`the first part.
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` So there is not an argument that we
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`didn't try. We did. We did the best we could
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`with the space we had. If you look at every
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`petition that I'm aware of, a limited amount of
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`space is spent dealing with 314, 325(d) issues,
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`and then basically we let the Patent Owner frame
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`their issues and then, as I said, the three IPR
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`decisions where the board has allowed the parties
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`to address their arguments just in response.
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` As far as case law, again, you know,
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`the board is not in the habit of designating cases
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`precedential because they are, you know,
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`duplicative of an existing body of law.
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`Obviously, the Bionics case put forth the
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`two-factor test, 325(d), and that could not have
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`been contemplated by anything that we did, and we
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`should be allowed to address that. And the Apple
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`factors dealt with the corresponding district
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`court litigation.
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` Those cases, if you look at the Patent
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`Owner's PORP on their Table of Index, said patent
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`is cited everywhere. They are the two most
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`heavily relied upon cases, and rightly so because
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`those are the prior definitive standards sitting
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`here today. But, again, there is no way we could
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`have foreseen those particular arguments,
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`especially given they did set forth a new
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`standard, a new two-factor test and a new set of
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`factors to address 314 that was not previously
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`stated in any prior case that I'm aware of.
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` As far as the patent that we are
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`challenging ourselves, the district court did
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`involve different patents, and I'm not aware of
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`any case law that says a different patent in front
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`of a district court can have an impact on 314(a),
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`similar to what the Patent Owner basically said,
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`so I'm not aware of any case law either. So I do
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`think we should also be allowed in connection with
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`314(a) to discuss that since I think the parties,
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`you know, neither party can cite a case there is a
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`certain, I guess, novelty to the argument that
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`Patent Owner is trying to advance, and certainly
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`if he can't cite a case where that has been dealt
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`with previously, you know, I think it does warrant
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`further discussion and a rebuttal from our part.
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` THE COURT: Okay.
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` Mr. Malik, I presume you would be okay
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`if we were to authorize a reply with us limiting
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`it to just a response to the 314 and 325 arguments
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`that were raised in the preliminary response; is
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`that right?
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` MR. MALIK: Yes. We intend to respond
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`to what they said.
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` THE COURT: Okay, so there is no --
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`you know, in other words, I want to avoid the
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`possibility of you realizing that perhaps there
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`was an element of your case in chief that you
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`missed that you want to fill in the blanks on.
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` MR. MALIK: No, that is not my intent.
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`My intent is not to fix the prima facie case to
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`the extent we find something.
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` The other thing is, Your Honor, that
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`same question has been posed to me by other
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`judges. You know, the response that I have is,
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`look, ten pages is extremely limited given that I
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`have to respond to 64. If I am effectively
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`wasting my page space on things you deem
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`irrelevant then obviously as judges you can simply
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`ignore it. I only have ten pages. If I waste two
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`of them on something that is improper or outside
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`the scope of your order, I basically reduce my
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`page count by 20 percent and obviously you can
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`just ignore it. The judge is obviously free to do
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`that, so I obviously have a vested interest in
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`focusing my arguments on just the points because
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`otherwise I'm effectively giving up page space.
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` THE COURT: Sure. Sure.
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` The other question I have for you is
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`Mr. Trask suggested that if we were to authorize a
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`reply he would like a surreply. Do you have any
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`objection to us doing that?
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` MR. MALIK: I guess the only thought
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`that I have on the surreply is the three cases
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`that I cited, IPR2019-400, 2019-1045 and 2019-207,
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`the surreply was in the first case ten and four,
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`and then it was ten and five, and then it was ten
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`and four. They have already spent 65 pages and
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`presumably they should have raised most of their
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`arguments. I presume they don't need equal page
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`space because they are just replying to what we
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`are going to say. So if the board is inclined to
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`give them a surreply, the only comment I would
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`have is that consistent with the board's three
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`decisions I just cited there should be a reduction
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`in page space because, again, they have had plenty
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`of space to address it already.
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` Obviously it's up to the board.
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` THE COURT: Mr. Trask, I will give you
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`the last words here. Any response to what
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`Mr. Malik has just discussed?
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` MR. TRASK: Yes. Thank you, Your
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`Honor. Just a few things briefly.
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` First of all, on the point that I
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`heard counsel raise about that if they had more
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`space they could make more arguments in their
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`petition, I mean that is obviously always going to
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`be the case with the Petitioner, and simply
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`wishing that the page limit was longer can't
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`constitute good cause for a reply. Otherwise
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`there would be a reply in every single proceeding,
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`and that's not what the board's rules contemplate.
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`So here I think there needs to be something more.
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` The board's decisions acknowledge that
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`it is not enough to simply wish there was more
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`space, and ultimately there is a strategic
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`decision that needs to be made by the Petitioner
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`as to whether or not to address certain issues
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`more totally than others. And Petitioner here,
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`they didn't use their entire page space. They
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`left about a thousand words, they left their
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`petition about a thousand words short, so they
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`could have included more than they did. But even
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`if they had wished to include more than that, they
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`made a strategic decision about what to address,
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`and they addressed the merits fully and they were
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`aware of, but gave briefer treatment to the 314
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`and 325(d) questions, and in my reading of the
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`board's cases that can't amount to good cause.
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` And then on the question of the
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`issuance of the precedential decisions, it is true
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`that we cite and rely on both the Apple and
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`Advanced Bionics cases, but those cases, as I
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`mentioned, are based squarely on the prior
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`precedent.
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` The Apple case, the entire legal
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`discussion in that case is under a heading called
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`Discretionary Denial under NHK. NHK was an
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`existing precedent at the time this petition was
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`filed and it was not cited or discussed once by
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`Petitioner. And then Advanced Bionics is
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`similarly situated with respect to Becton
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`Dickinson. The case walks through every one of
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`the Becton Dickinson factors as do we in our
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`response. Petitioner didn't cite that case once
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`or discuss any of those factors. So I don't think
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`the issuance of those decisions, though it changes
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`the landscape, from a good cause perspective
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`because there was a conscious decision by
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`Petitioner not to address this body of case law
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`and it doesn't benefit from the chance issuance of
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`a new precedent on a body of case law that it
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`opted not to rely on in the first instance, so I
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`don't think there is good cause on that basis as
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`well.
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` And then finally
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