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`Job No. 3244671
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`Telephone Conference - February 28, 2019
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` UNITED STATES PATENT AND TRADEMARK OFFICE
`
` _____________________________
`
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
` _____________________________
`
` NEPTUNE GENERICS, LLC
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` PETITIONER
`
` V.
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` AVENTIS PHARMA, S.A.
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` PATENT OWNER
`
` _______________________________
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` CASE NO. IPR2019-00136
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` PATENT NO. 5,847,170
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` FILED: MARCH 26, 1996
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` ISSUED: DECEMBER 8, 1998
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` INVENTORS: HERVÈ BOUCHARD,
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` JEAN-DOMINIQUE BOURZAT, ALAIN COMMERÇON
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` TITLE: TAXOIDS, THEIR PREPARATION, AND
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` PHARMACEUTICAL COMPOSITIONS CONTAINING THEM
`
` _______________________________
`
` TELEPHONE CONFERENCE
`
` FRIDAY, FEBRUARY 28, 2019, 12:03 P.M. CENTRAL STANDARD TIME
`
` BEFORE JUDGES TIMOTHY G. MAJORS AND
`
` TINA HULSE
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`800-336-4000
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`Page 1
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`Job No. 3244671
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`Telephone Conference - February 28, 2019
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` APPEARANCES:
` VENABLE, LLP
` DANIEL J. MINION
` 1290 Avenue of the Americas, 20th Floor
` New York, New York 10104
` Phone: (212) 218-2538
` Email: dminion@venable.com
`
` On behalf of the Patent Owner.
`
` SKIERMONT DERBY, LLP
` ALEXANDER E. GASSER
` 1601 Elm Street, Suite 4400
` Dallas, Texas 75201
` Phone: (214) 978-6600
` Email: agasser@skiermontderby.com
` On behalf of Neptune Generics, LLC.
` SKIERMONT DERBY, LLP
` MIEKE K. MALMBERG
` 800 Wilshire Boulevard, Suite 1450
` Los Angeles, California 90017
` Phone: (213) 788-4500
` Email: mmalmberg@skiermontderby.com
` (Pro hac vice application to be submitted)
` On behalf of Neptune Generics, LLC.
`
` * * * * * *
`
` Christina Basis-Prinzi
` Certified Shorthand Reporter and
` Registered Professional Reporter
` CSR No. 084-001769
` One North Franklin Street, Suite 3000
` Chicago, Illinois 60606
` Phone: (312) 442-9087
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`Job No. 3244671
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`Telephone Conference - February 28, 2019
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` THE COURT: Would counsel please identify
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`themselves?
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` MR. GASSER: Alex Gasser for the Petitioner.
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` MS. MALMBERG: Mieke Malmberg for the Petitioner.
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` THE COURT: And for patent owner?
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` MR. MINION: Good afternoon, your Honor. This is
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`Daniel Minion on behalf of patent owner, Sanofi.
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` THE COURT: Hello, Mr. Minion. Anyone else on
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`line for the patent owner?
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` MR. MINION: Just me, your Honor.
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` THE COURT: All right. I take it that's everyone
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`then.
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` Did you get what you need, Court Reporter?
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` THE COURT REPORTER: Yes. And like I said, if
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`they could just state their names before they speak just so I
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`make sure I have everything straight, that will help me a
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`lot.
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` THE COURT: We'll do our best.
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` THE COURT REPORTER: Thank you so much, Judge.
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` THE COURT: Why don't we go ahead and begin then.
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` We're here today based on a request for a
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`conference from the petitioner. This is in regards to
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`IPR2019-00136, Neptune Generics vs. Aventis.
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` What we will go ahead and do, since petitioner
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`requested this call -- and we just did the email, and so we
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`know the general nature of the request, but we'll open the
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`floor up to petitioner's counsel. And then, Mr. Minion,
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`you'll have an opportunity to respond.
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` MR. GASSER: Thank you, your Honors. This is Alex
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`Gasser for petitioner, Neptune.
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` As we indicated in our email from last week,
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`petitioner requests authorization to file a reply brief to
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`patent owner's preliminary response. Our request for
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`authorization is pursuant to 37 CFR, Section 42.108(c).
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` As we indicated in our email, there are
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`three general areas that we think are appropriate for a reply
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`brief and that they're good grounds to have such a reply
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`brief on the subjects. The primary area, which our
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`understanding is, the PTAB generally does regularly consider
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`replies for the Section 327(d) discretionary input for
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`arguments and issues relating to prior arguments that were
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`presented to the patent office, whether through an
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`examination or a formal IPR petition. I think our -- our
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`main arguments focus on that particular prong.
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` Also, in addition to that, we do believe that
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`there is additional reason to allow a reply brief on the
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`314 -- Section 314 arguments -- the discretionary arguments,
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`as well as just one legal, critical issue that permeates
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`Job No. 3244671
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`Telephone Conference - February 28, 2019
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`patent owner's entire patent response regarding the
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`standard -- the proper standard for obviousness.
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` But just, very briefly, launching into the first
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`prong of the reason for good cause for a reply brief would be
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`the 325(d) arguments which focused primarily on the
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`earlier -- the differences between the earlier IPR petition
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`filed by a different party, Mylan Pharmaceutical, against the
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`same patent by Sanofi.
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` There are several issues relating to the 320, but
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`the arguments that we could not have reasonably anticipated
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`(sic). Just briefly for review, our petition at present --
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`Neptune's petition relies on what we call (inaudible)
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`reference --
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` THE COURT REPORTER: What reference was that? I'm
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`sorry.
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` MR. GASSER: I'm sorry. Commercon,
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`C-o-m-m-e-r-c-o-n.
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` THE COURT REPORTER: Thank you.
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` MR. GASSER: Commercon reference which is
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`Exhibit 1009. And the Neptune petition relies on this
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`primary reference as a guide to take our lead compound which
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`is Paclitaxel and there's one change to the side chain. And
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`then we'll rely on this to inform a person of ordinary skill
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`in the art what portions of the remaining molecule should be
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`maintained, which portions remain flexible. And this,
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`essentially, locks down about 90 percent of the molecule and
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`gets us about 90 percent of the way to the claimed singular
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`compound.
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` And, additionally, the Neptune petition focuses
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`on prior arguments for testimony relating to starting
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`material to generate Paclitaxel analogs, which is the 10 gap
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`starting material which also motivates changing the C-7 and
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`C-10 positions on the Paclitaxel lead compound.
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` Now, essentially, one of Mylan's 325(d) arguments
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`is that Mylan's prior petition duplicates our reliance on the
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`Commercon reference. And just in view of what I just
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`described as how we're relying on the Commercon reference, we
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`don't believe we should have reasonably anticipated that
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`Sanofi would have argued that our petitioner's reliance on
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`Commercon was duplicated in the Mylan petition.
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` And, basically, Sanofi focuses just on the fact
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`that the Mylan petition relies on different pieces of prior
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`art to show that different functional groups at the C-7 and
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`C-10 positions could be switched out.
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` And given our very different approaches and
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`reliance on Commercon and the fact that the Commercon
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`reference itself, of course, was not even part of the Mylan
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`petition, we think that warrants a response.
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` THE COURT: Mr. Gasser, this is Judge Majors.
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` And I will confess that I have not read through
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`all of your papers in great depth yet, but I did not
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`understand or did not see it as the principal point that
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`patent owner was making in terms of the -- the prior argument
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`being advanced was Commercon -- it seemed to me they were
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`saying, Okay, maybe you start with a different reference and
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`a different lead compound that's going to be modified or
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`substituted in certain ways, but at some point in the
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`process, you're going to get to the same intermediate which
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`is -- as I understand it, is going to be further modified
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`using the -- and I may be forgetting. But if it's the cancer
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`(inaudible) reference for the same reasoning that was
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`advanced in the earlier Mylan petition, what do you have to
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`say about that?
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` MR. GASSER: Right. And I'd say those are two
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`separate arguments which each independently warrants a
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`response or a reply that couldn't have been anticipated.
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` With respect to the Commercon argument, that is
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`actually specifically identified at the top of Page 24 of
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`patent owner's response where they say, Neptune uses
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`Commercon for the notion that the C-7 and C-10 positions are
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`flexible. And they're saying, Well, Mylan pointed to other
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`art to argue that the C-7 and C-10 positions were available
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`for substitution. So they're basically conflating Commercon
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`and how we're relying on Commercon for different arguments
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`that Mylan made in their petition.
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` And my point is that given how differently we
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`relied on Commercon as opposed to the arguments that are in
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`Mylan, that is one aspect that warrants a response. And
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`given the difference in how we rely on those and make those
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`arguments, that is a significant difference that, A, we
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`couldn't have anticipated and, B, warrants a response.
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` Now, going back to your point, that would be the
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`second -- a second reason for addressing the 325(d) argument,
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`which is Sanofi's conflating the lead compound analysis,
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`which is basically what I believe you were referring to.
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` So they basically say, Well, even though we start
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`with different lead compounds, Mylan's petition -- the
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`arguments in Mylan's petition conflate with ours because you
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`basically end up with Compound 20 and use that as a, sort of,
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`jumping-off point. That's one of their other arguments in
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`the 325(d) section.
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` And the response is, Well, that would be a very
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`difficult argument for us to have anticipated because, first
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`of all, we obviously start off with a very different lead
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`compound, Paclitaxel. And the arguments that Mylan made
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`regarding Comp 20 is they argued that Comp 20 should be the
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`lead compound just right out of the gate, and the PTAB
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`thought that was really unwarranted and basically determined
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`that Mylan basically didn't successfully even start getting
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`out of the gate because they didn't have a basis for arguing
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`why Comp 20 should be a correct lead compound.
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` And so given those fundamental differences, that
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`would be one additional reason why, you know, a -- a reply
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`brief would be warranted and, we think, helpful to address
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`some of those distinctions.
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` THE COURT: Why don't you talk quickly on the
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`314 issue.
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` MR. GASSER: Sure.
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` THE COURT: As I understand it, the -- I mean,
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`it's petitioner's position that the patent owner in some way
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`is misstating what the law of obviousness is.
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` MR. GASSER: Right. And those are maybe the two
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`quicker issues, at least the 314 issue. And that one has to
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`do with the fact that patent owner relied on a PTAB decision
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`that issued a month or two after our petition was filed. And
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`so, obviously, we couldn't have anticipated responding to
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`that.
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` And this all relates to their 314 argument that a
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`related District Court action to which Neptune was not a
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`party, in effect, addresses the same arguments involving the
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`same prior art. And we would -- we believe it'd be fair and
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`appropriate for us to reply to that, given that we couldn't
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`have anticipated a response to that. Basically, because --
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`among other things, we think a reply is warranted because
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`that case relies on the identical parties to an IPR and a
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`related District Court action, the same experts, and the same
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`exact prior art. And we don't have that situation. And we
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`think it would be appropriate for us to reply and distinguish
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`those. So that's the second, sort of, major area that we
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`believe a reply would be appropriate.
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` And the third and final response for which a reply
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`would be warranted is the -- I would say an invitation by
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`Sanofi for the PTAB to commit legal error by insisting that a
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`particular property of the claimed Paclitaxel, namely that it
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`has increased activity -- anticancer activity for drug
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`resistant strains if that expected property is not present,
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`then there cannot be prima facie obviousness. And that is a
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`gross misstatement of the law regarding obviousness at the
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`prima facie stage. It effectively confuses and merges the
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`expectation of success at the prima facie stage with
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`unexpected results or unexpected results that are secondary
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`considerations that are entertained only after a prima facie
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`case with obviousness is demonstrated.
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` And the cases that Sanofi cites for the general
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`proposition that properties should be expected -- if you look
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`closely at the cases, those relate to cases where an actual
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`claim limitation -- or there's either -- it's either relating
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`to claims that include a particular use -- a method of use or
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`a method of treatment or particular claim limitations
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`regarding such a particular benefit or property. We don't
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`have those in this case.
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` The two claims at issue relate to the naked
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`compound itself, as well as a composition for that compound.
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`And there is ample Federal Circuit case law -- well, we
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`identified in our opening brief, Otsuka, which says, Hey,
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`look, when you're dealing with a compound claim, you just
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`look at the -- it's the scope of the claim that determines
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`reasonable expectation of success. And when it's a compound,
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`a reasonable expectation of success is defined by a person of
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`ordinary skill expectation to synthesize that compound and
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`that's it.
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` THE COURT: I'll go ahead and cut you off,
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`Mr. Gasser. I think we understand petitioner's position.
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` Mr. Minion, would you like to respond?
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` MR. MINION: I would. Thank you, your Honor.
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` I'll address the issues in the same order starting
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`with the 325(d) issue. The issue considering typically
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`whether a reply is warranted or good cause is shown really
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`comes to the point of reasonable foreseeability. We have, as
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`counsel for petitioner, acknowledged they did address the
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`issue of 325(d). And I think the problem -- or the reason
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`for reply suggested by petitioner was that they did not
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`foresee our argument that the references cited were
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`cumulative and the arguments were substantially the same.
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`And that really comes down to a strategic decision on
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`petitioner's part to basically come in and summarily say,
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`This is a different prior art combination; therefore, there
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`is no 325(d) issue. And just summarily state that, We have a
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`different lead compound; therefore, it's on the threshold.
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`Discretionary issues should not be warranted. But those
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`issues go straight to the heart of 325(d). And I think for
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`those purposes we submit that they should not get a reply
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`argument.
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` On the 314(a) issue, I think there was a
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`suggestion that -- that the -- that 314(a) issues were not
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`foreseeable. In fact, in the petition on Pages 34 through
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`36, petitioner addressed the District Court decision,
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`acknowledged the District Court bound and upheld the
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`validity. They actually attached the opinion of the District
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`Court decision as Exhibit 1049, and also specifically
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`addressed Section 314 in Footnote 3 in Paragraph 78.
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` THE COURT: I'll interrupt you for a second,
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`Mr. Minion, there. I understood petitioner to be saying not
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`so much that 314(a) potential discetionary denial was not
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`foreseeable but that some recent decision from the PTAB,
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`specifically invoking 314(a) because of the stage of the
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`litigation proceedings, was sufficiently advanced that the
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`PTAB should essentially step away.
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` MR. MINION: That's the basic gist of what I
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`understood they are asserting was unforeseeable on 314(a) --
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` THE COURT: Well, it --
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` MR. MINION: -- because --
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` THE COURT: Go ahead.
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` MR. MINION: I'm sorry, your Honor, to interrupt.
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` But in that case, when we are talking about
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`whether -- weighing whether the District Court proceeding has
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`advanced to a certain stage, really, that's not applicable
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`here. We actually had a decision from the District Court.
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`So the issue is -- the issue is whether -- that we need to
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`reopen up the attack on the validity of this patent after the
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`District Court has already held the patent valid using the
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`same -- substantially the same arguments and substantially
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`the same prior art. So that the specific case that they're
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`having an issue with and the timing of that I don't think is
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`really relevant. They're obviously aware of the issue of
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`314(a) and the discetionary -- or the threshold discretionary
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`-- discretion of the board to deny the 1201 petition even if
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`it's from a petitioner that's filing their first petition.
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` And, in fact, I mean, that's really what --
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`petitioner addressed that very issue on Pages 34 through 36
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`in saying that, Yes, we acknowledge that the District Court
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`upheld the validity of this patent, but we think that
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`decision is irrelevant. They clearly foresaw the potential
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`impact of the District Court decision on the threshold
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`discretionary issues here, 314(a).
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` THE COURT REPORTER: Was this Mr. Minion just
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`speaking, please, for the court reporter?
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` MR. MINION: Yes.
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` THE COURT REPORTER: Thank you.
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` MR. MINION: Yes, it was.
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` THE COURT: Thank you, Mr. Minion. I interrupted
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`you earlier on 314(a). Do you have anything further to say
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`on that? Or do you want to move on to this legal issue
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`about, I guess, expectation of success versus unexpected
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`results?
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` MR. MINION: Yes. I think, your Honor -- I think
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`I can move on to the last issue. And, frankly, we have the
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`right standard. I'll say that right off the bat. I'm
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`capable -- or I'm confident that the board is fully capable
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`to assess petitioner's obvious contentions and understand the
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`legal analysis as to unexpected results.
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` As to their argument that unexpected results
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`really are applicable to method of use claims, it's pretty
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`standard law and most patent practitioners recall In Re:
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`Papesch which very clearly states a compound and its
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`properties are inseparable. So just showing that a prima
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`facie showing that a structure was obvious is insufficient to
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`render that claim invalid. One needs to have a reasonable
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`expectation that the claimed compound would have the
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`properties inherent to that compound.
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` But as I say, I think on these issues, purely
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`legal issues, replies, my understanding, are very rarely
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`granted.
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` THE COURT: Thank you, Mr. Minion.
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` Anything further for patent owner?
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` MR. GASSER: Just very briefly.
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` MR. MINION: I'm sorry. Nothing for now. This
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`was Dan Minion.
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` THE COURT REPORTER: Thank you.
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` THE COURT: Mr. Gasser, I'll let you have a very
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`brief response on the points that Mr. Minion raised, if you'd
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`like.
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` MR. GASSER: Sure, just very briefly.
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` I would point out that different PTAB board
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`decisions have pointed out that, you know, even though
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`petitioners addressed 325(d) issues in a petition, the boards
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`don't expect a petitioner to necessarily foresee and address
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`every potential counterargument in a petition. And I'm just
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`quoting directly from Indivior, Inc. vs. Rhodes
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`Pharmaceuticals, IPR2018, 795 --
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` THE COURT REPORTER: I'm sorry? What was after
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`795?
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` MR. GASSER: Paper 19. IPR2018, dash, 795.
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` THE COURT REPORTER: Thank you.
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` MR. GASSER: And then, additionally, I think your
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`Honor nailed it about the 314 issues. We're just focusing on
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`the fact that they're relying on -- patent owner relies on a
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`case that issued after our petition was filed, and they don't
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`just cite it, they rely on it and expound on it for an entire
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`page. And I think, in fairness, we should be able to respond
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`to that.
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` And then just, lastly, petitioner acknowledges
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`that as a general rule the board does not necessarily provide
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`replies based on pure issues of law. However, I think in
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`this case, given the central focus of patent owner's
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`preliminary response on the activity relating to drug
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`resistance and the fact that they are relying on Federal
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`Circuit case law that relates to claims with methods of use
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`for other treatment limitations, we do have a clear
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`difference in opinion and it's a fundamental issue that
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`permeates their entire preliminary response.
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` And, certainly -- certainly, the petitioner does
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`not take issue with the fact that unexpected results can
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`certainly relate to a simple compound claim. But, again,
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`that relates to matters outside of the prima facie case of
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`obviousness and not at the prima facie obviousness stage.
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` And I would simply direct the board -- if they're
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`not going to consider a reply brief on this, I would direct
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`the board to the Bristol-Myers Squibb vs. Ativa
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`Pharmaceutical case, 752 F3d 967, stating that, Unexpected
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`properties do not upset an already established motivation to
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`modify a prior art compound based on expected properties of
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`the compound, as well as In Re: Dillon, 919 F2d 688 --
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` THE COURT REPORTER: Would you say the citation
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`again on Dillon?
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` MR. GASSER: 919 F2d 688.
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` THE COURT REPORTER: Thank you.
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` MR. GASSER: Which states that basically
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`unexpected results have no place at the prima facie stage.
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`It's obvious that they come into play in secondary
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`considerations on obviousness. And that is all I have on
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`that point for now, your Honor.
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` THE COURT: Two quick points before I go on hold
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`for a moment so I can chat with Judge Hulse. Whoever
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`arranged for the court reporter, can you please have the
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`transcript filed? And, second -- and, second, Petitioner, if
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`we do agree and we do grant the request for additional
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`briefing at this stage, how many pages of briefing is
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`petitioner asking for?
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` MR. GASSER: I think that we can get these done in
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`a pretty short order. I would say five pages for the 325(d).
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`Perhaps, one page for the 314. And one page for the
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`obviousness issues. That would be a total of seven pages.
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` THE COURT: Okay. All right. Let's go on hold
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`for -- hopefully, it won't be more than a couple of minutes.
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`And Judge Hulse and I will come back on shortly and let you
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`know what our decision is.
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` MR. GASSER: Thank you.
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` (A recess was taken.)
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` THE COURT: Hello, this is Judge Majors again. I
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`have had a chance to talk to Judge Hulse. Here's our
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`decision on petitioner's request:
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` Petitioner, we're going to authorize an additional
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`filing of no more than five pages. I'm not going to specify
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`how you want to apportion or how petitioner should apportion
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`those five pages. You can use them however you want. But I
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`would encourage you to not dwell on the Legal Issue Number 3
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`or the legal matters. If there is a case or two you want to
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`flag for us, that's fine. But it's probably unnecessary to
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`spend too much of your briefing on that issue.
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` Any questions about that?
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` MR. GASSER: This is Alex Gasser. Thank you. I
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`understand. The five pages with respect to however we want
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`to apportion our three, sort of, general areas that we
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`discussed on the call -- I appreciate that.
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` THE COURT: Correct. And in terms of a due date,
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`unless you have some reason that it can't be filed by next
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`Thursday, that is going to be the date that we set. Is that
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`doable?
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` MR. GASSER: I think that should work. Thank you,
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`your Honor.
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` MR. MINION: This is Dan Minion for patent owner.
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` Are you -- is the board open to a request for a
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`surreply if we see a need?
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` THE COURT: Not at this time. Let me clarify
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`that. I'm not going to say one way or the other whether
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`we're open to it. I think it's premature at the moment.
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`Let's see what petitioner's filing says. And if after
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`reading it patent owner believes that there really is a need
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`for some additional briefing, then we can schedule a
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`conference to talk about it.
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` But as a general matter -- I'm sure you can find
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`decisions of the board both ways. But as a general matter,
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`those are usually not a lot of preinstitution. But, again,
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`lets wait and see at this point what is in the filing.
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` MR. GASSER: I understand, your Honor. Thank you.
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` THE COURT: All right. Well, unless there is
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`anything further from any of the parties, why don't we go
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`ahead and adjourn. And the -- we'll prepare -- the board
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`will prepare something in writing. I don't know whether it
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`will come via email or a content of the proceeding order at
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`this point, but we'll try to get that out very quickly.
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` MR. GASSER: This is Alex Gasser. Thank you very
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`much, your Honors.
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` THE COURT REPORTER: Could you tell me about the
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`transcript? What we need to do so I know?
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` MR. GASSER: This is Alex Gasser. I think what
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`we'll do is -- basically, if you could, I'd say, in an
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`expedited manner, provide me with a copy of the transcript.
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`And then I will coordinate with counsel for patent owner on
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`preparing an errata sheet that we will then jointly submit to
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`the board as a next exhibit.
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` So from your end, if you can just prepare the
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`transcript and forward it to us, that will be great. Then I
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`think we'll take it from there.
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` THE COURT REPORTER: When do you need it by?
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` THE COURT: This is Judge Majors and Hulse. We
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`are going to drop off. There's no criticality to you filing
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`that ASAP. Just when it's ready. Thank you.
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` THE COURT REPORTER: Sorry, Alex.
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` MR. GASSER: No worries. In light of that, if
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`there is no hard date to get that on file, I guess we can
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`just have it in the ordinary course.
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` When do you think that you would be able to get it
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`to us in the ordinary course?
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` THE COURT REPORTER: Normal delivery is either
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`eight or ten days.
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` MR. GASSER: I'd prefer to have it more expedited
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`than that.
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` THE COURT REPORTER: How about a week? Do you
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`want next Friday?
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` MR. GASSER: Why don't we go for a week?
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` THE COURT REPORTER: Yes.
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` MR. GASSER: And this is a relatively short
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`transcript. If there's a way to just, sort of, knock it out
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`and just get it over with, I would appreciate that.
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` THE COURT REPORTER: I do appreciate that. I'm
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`going to have to contact somebody because there is
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`terminology here I am quite unfamiliar with it. Because they
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`mentioned some drug names.
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` MR. GASSER: We can talk either off line --
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` THE COURT REPORTER: Okay. Let's do that.
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` MR. GASSER: Mr. Minion, if you want to drop off,
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`I can keep the court reporter on the line and go over certain
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`terms that may not have been immediately apparent -- what we
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`were referring to.
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` MR. MINION: I'm going to drop off.
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` (The conference adjourned at
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` 12:40 p.m.)
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