UNITED THERAPEUTICS CORPORATION v. LIQUIDIA TECHNOLOGIES, INC.
Oral Argument — 09/03/2024 · Case 24-1658 · 47:25
0:00
Judge Prost
The next case for argument is 24-1658, United Therapeutics Corporation v. Laquidia.
1:02
Appellant Attorney
Good morning.
1:03
Good morning. May it please the court. I'm Doug Carson on behalf of United Therapeutics.
1:07
I'd like to start with three points that I think are significant.
1:11
Judge Prost
Before you do that, and I will let you do that, and this isn't going to take too much time,
1:14
but you started this. You gave us a 28-J letter at the end of last week about the FDA.
1:19
I mean, maybe I missed something, but I had been assuming all along, based on your request for a stay
1:25
and the arguments of irreparable harm and so forth, that the district court's vacating of the injunction
1:31
was having some immediate effect on what happened with the FDA, et cetera.
1:36
I don't know. I don't understand the details of this, but the suggestion is, I guess,
1:41
that that wasn't a correct assumption. So can you just tell me what's going on with the FDA?
1:46
Appellant Attorney
Absolutely. As your honors are aware from the Hatchwaxman line of cases,
1:50
there's a whole bunch of exclusivity wrinkles that go on. Some are patent and some are regulatory.
1:55
In this circumstance, the FDA, very recently, shortly before the issuance of the Rule 28-J letter,
2:04
indicated that they had provided a new exclusivity to my client, United Therapeutics product,
2:10
which, if taken, would preclude final approval to Liquidia's product until May of 2025.
2:18
Judge Prost
And what effect, if any, does the vacating of the injunction have?
2:25
Or are they operating because we haven't yet affirmed or reversed that? Are they waiting for us?
2:31
I mean, what does the FDA do then if, let's assume, we affirm the injunction?
2:38
It's a very...
2:39
We affirm vacating the injunction. Does that automatically change this?
2:44
Or is this kind of a separate thing going on?
2:46
Appellant Attorney
This is a separate thing going on.
2:48
This is a separate thing going on.
2:48
I would note, though, Your Honor, so the vacating of the injunction would independently prevent the FDA,
2:55
I'm sorry, restoring the E4A order would prevent the FDA from approving, finally, the Liquidia product
3:06
up until either the patent goes away, i.e. it's canceled, or the patent expires, which would be 2027.
3:16
This separate act by the FDA...
3:20
is a separate act of exclusivity, and it maintains that Liquidia's product could not be approved until May of 2025.
3:29
So it is separate and distinct.
3:31
The terms of these potential exclusivities are different, however, Your Honor.
3:37
And I would note that Liquidia did sue the FDA over that exclusivity, claiming that it was wrongly submitted.
3:45
And the District of Columbia District Court...
3:49
has issued a scheduling order on an expedited summary judgment basis, where that will be heard in December, I believe December 5th of this year.
3:58
Judge Cunningham
So, Counsel, just so I make sure I understand correctly, even if we affirm the District Court, you're saying Liquidia cannot get on the market with this product before May 2025?
4:09
Appellant Attorney
Unless something happens with the District of Columbia, where in December it decides that the exclusivity was improperly submitted.
4:19
Or, that the exclusivity was improperly granted by FDA.
4:21
So there is an option for...
4:23
Judge Prost
Well, you mentioned, though, I was a little confused by your statement again.
4:25
I don't want to... I promise this will be my last question.
4:27
You mentioned, what if the...
4:30
What if we affirm, and the PTO cancels?
4:36
Does that affect the FDA?
4:38
Does the FDA then...
4:41
Does that change its conduct with respect to our case, and this other exclusivity, this other thing?
4:48
Appellant Attorney
The...
4:50
cancellation of the patent would have no effect on the other regulatory exclusivity that the FDA
4:58
has issued and what Liquidia is fighting about in terms of the District of Columbia.
5:03
Judge Prost
They are two separate pathways, Judge. All right. Why don't we restart the clock and we'll let your
5:09
friend know if he has anything to say about that. We'd like to hear that and then we will talk to
5:12
you. So why don't we restart the clock? All right. Back to your three points. Well, thank you and may
5:17
Appellant Attorney
it please the Court. I'd like to start with three points here. First, the 793 patent is in force
5:24
today. It is not expired. It is not canceled. It was infringed, affirmed infringed, and a mandate
5:32
was tendered by this Court back to the District Court. We have rights in that patent today. An E4A
5:40
order, it requires an unexpired patent that has been adjudicated infringed by a District
5:47
Court. We have rights in that patent today. An E4A order, it requires an unexpired patent that has been adjudicated infringed by a District Court.
5:47
We have rights in that patent today. An E4A order, it requires an unexpired patent that has been adjudicated infringed by a District Court. We have that standing here today.
5:49
Judge Prost
Or if in the meantime, there's been a passage of time here, some other generic comes in and prevails
5:56
before the District Court in an invalidity case. Are you saying that the E4 still would preclude
6:02
anything being done until the expiration of the patent? Well, certainly that's not the case that
6:08
Appellant Attorney
we have before us. I wouldn't ask the question. Understood. But the statutes and
6:18
regulations from Hatch Waxman treat District Court invalidity different than they do unpatentability
6:25
Judge Prost
findings. So is the answer yes? That an E4A would not be construed to override or somehow supersede
6:34
a finding in another case with another generic that the patent was invalid? I'd want to look to
6:40
Appellant Attorney
make sure, but I believe for XY and Fresenius, it ought not have any effect because of the finality
6:49
of the final judgment.
6:51
Below in the earlier case, assuming there's no co-pendency of those cases. However, there is a
6:58
Hatch Waxman statute, 21 U.S.C. 355, which provides that upon affirmance of a District Court
7:06
invalidity or a decision of invalidity by District Court, that has immediate effect that day.
7:13
Judge Prost
In other words, it's correct that if another generic came in and got a judgment, maybe
7:19
affirmed by us, man.
7:21
So if the District Court had issued that the patent was invalid, then they would have the right to go
7:25
on. So all of them have these rights, but the quidia doesn't.
7:29
Appellant Attorney
I believe that's the case. I'd want to look at the Hatch Waxman Act to see if it specifies
7:34
about whether that could impact a separate case or only the case in which...
7:39
Judge Prost
So you're meaning E4 and the importance of saying that it only expires at expiration
7:47
applies only to a generic who is cummised in a separate case?
7:53
Well, I think, again, we're now talking about a situation where we have a final judgment from
8:02
Appellant Attorney
the original matter. I think the E4A order could be subject to a Rule 60B attack under 60B.4 in
8:12
the case that Your Honor is hypothesizing, and that is that the underlying basis for the injunction
8:17
no longer exists, i.e., you have a...
8:21
a patent while it's not expired, the patent no longer exists that would support the
8:27
continuance of the E4A order.
8:29
Judge Prost
And the same would be true in your view if the PTO yesterday or today or tomorrow, I don't know if you have
8:34
checked, I'm assuming they haven't canceled it yet?
8:36
Appellant Attorney
No, they have not. In fact, this is up on appeal, well, a cert petition to the Supreme Court, and one
8:44
justice has asked for a response from liquidity.
8:46
Judge Prost
Right, I know, it's on conference for September 30th.
8:49
Appellant Attorney
It should be, we may have a decision as early as...
8:51
as October.
8:52
Right.
8:53
And so, this is not speculative. There may, in fact, be not ever a cancellation of the 793.
9:01
Judge Prost
Well, how do you know, except for the fact that you cite return mail and in rate ham and what
9:07
went down there with respect to the PTO and the registration and the cancellation, do we know,
9:13
I mean, is it on the PTO website what they do? Do we know that they are holding this cancellation
9:18
for Supreme Court review?
9:21
We don't know.
9:21
We don't know for sure.
9:22
We don't know.
9:22
Appellant Attorney
We don't know for sure. However, the indications from return mail and from the trademark case that we cite in our
9:28
appendix, which uses the exact same language, are highly suggestive that the Patent Office will not cancel a claim
9:35
before the expiration of Supreme Court review. And that's, I think, the return mail makes that...
9:41
Judge Prost
Well, I'm not sure I get exactly that from the submissions in the appendix, because in, what's the second case?
9:50
In...
9:50
In...
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The return mail case.
9:53
Yes.
9:53
They did issue the cancellation, and then they were told that, wait, the Supreme Court is granted review, and they said,
10:00
in light of that order, the decision to grant cert, not the decision to file for cert, but the decision to grant cert,
10:08
someone called a patent review quality assurance specialist vacated the certificate.
10:16
Appellant Attorney
You're correct, Judge Prost.
10:17
Okay.
10:17
We read that, however, as a broader...
10:21
General policy that the Patent Office will wait until there's finality of every...
10:28
Judge Prost
So, we're supposed to take an order from before a patent review quality assurance specialist is saying this is the way that we proceed.
10:40
They didn't proceed that way in this case.
10:42
So, they said, okay, we've got to change it in this case because there's a border granting cert, and you're saying we should read that as a patent office policy,
10:50
that they don't...
10:51
Grant, they don't issue the certificate until as long as you file for cert?
11:00
I don't know.
11:01
Appellant Attorney
Well, as long, insofar as the cert petition is pending, and if cert is granted, then return mail absolutely applies on its face,
11:08
where cancellation would be inappropriate.
11:12
Judge Cunningham
Counsel, how is it equitable to keep Liquidia as the only entity precluded from practicing the subject matter covered by the 793 patent clause?
11:21
Appellant Attorney
Well, Your Honor, I don't believe that they are uniquely situated.
11:25
As I started at the outset, the 793 patent exists today with enforceable rights under E-plus and the bingo case.
11:36
We could, in theory, assert this patent, the 793 patent, against a generic filer subject to Rule 11 and subject to 35 U.S.C. 285 fee issues.
11:49
Judge Cunningham
Do you think that you would be able to get over the Rule 11 hurdle?
11:51
Of asserting the 793 patent as it stands now in light of the PTO's decision?
11:57
Appellant Attorney
Well, that issue has not mercifully been presented to the client, and I can't speak for what the client would want to do in that circumstance.
12:05
But under...
12:06
Judge Cunningham
Pretend you're czar.
12:06
Just for my purposes, my hypothetical, pretend you're czar.
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Your clients always agree with whatever you say.
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I know this is not necessarily the case.
12:13
Would you feel comfortable asserting the 793 patent claims as it stands now against another party?
12:20
No.
12:21
Appellant Attorney
No.
12:21
Preference would be probably not to assert it.
12:24
And in fact, Your Honor, because of the XY co-pendency requirement, remember, they had a separate...
12:30
Another indication, Liquidia did, that was pending.
12:35
When the PTO written decision came down and the affirmance by the court, in that co-pending case, we removed without prejudice the 793 out of deference to this court's jurisprudence in XY and proscenious.
12:50
And so it's a different issue if we're looking at something that would have a new complaint filing against a new party.
13:00
And in that case, my recommendation, I suspect, all things being equal, would be, you know, we probably ought not proceed.
13:08
However, the issue that the final written decision grappled with was 103, which was withheld strategically from the Hatch-Waxman.
13:21
And so essentially, what Judge Andrews did here in amending the E4A order to take that away, he gave Liquidia a separate off-ramp while still maintaining all the advantages of the Hatch-Waxman Act.
13:39
And that's a balance that only Congress could make.
13:43
And Congress did not do that when they adopted the AIA, the Hatch-Waxman Act, but it's carefully balanced, generic versus branched.
13:51
And Congress chose not to give an off-ramp.
13:55
Judge Prost
Okay, let me just move on a little bit.
13:58
Go ahead.
13:59
On the cancellation and the effect of the cancellation, so if the Supreme Court denies cert on October 5th, that doesn't change your position, right?
14:11
Because you still need cancellation.
14:13
Appellant Attorney
Right.
14:14
Under this court's case law, the cancellation is what expires the rights.
14:17
And so we would wait for cancellation.
14:20
Judge Prost
Does it matter?
14:22
Does it matter that cancellation is a ministerial event or task?
14:27
Appellant Attorney
I don't believe so.
14:29
Ministerial?
14:30
Go ahead.
14:30
You agree it's ministerial?
14:32
Well, standing here today, I can't think of some discretionary act that might have to happen or some way in which cancellation wouldn't follow.
14:44
So in that sense, yes, I agree it might be ministerial.
14:47
But ministerial acts are very important across the board.
14:50
Ministerial doesn't mean they're not important.
14:52
Judge Prost
Well, I don't know.
14:54
I don't know what important means, but it is a ministerial act.
14:58
So you're saying that it's not the final judgment of this court in which a mandate is issued that somehow cancellation, a non-discretionary ministerial act, trumps or precludes that from having effect.
15:12
It's the case.
15:13
Let's say the PTO loses a document and it doesn't issue a cancellation for a year.
15:18
I mean, what does cancellation do if it's a ministerial act in which there's no discretion?
15:24
Appellant Attorney
Well, Congress said 318 and Section 318B, cancellation is what extinguishes the rights.
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That's the law of this court.
15:32
Now, had Liquidia actually pursued its argument before district court, it would never be in that circumstance.
15:39
This is exactly the off-ramp that they're looking for by virtue of not having to face a clear and convincing evidence standard.
15:47
Judge Prost
You suggest that some of this stuff is nefarious.
15:50
This is the world we live in, and there's nothing nefarious.
15:52
And I'm sure you, for your clients, take full advantage, up front, in a respectable way, and use all of the vehicles.
16:01
So, I mean, you've made a few suggestions here as if there's something sinister and nefarious in terms of the way things have proceeded here.
16:08
This is the world we live in.
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Appellant Attorney
Your Honor, I am not saying anything nefarious has happened.
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What I am—
16:13
Judge Prost
That's the system that's been upheld by the Supreme Court.
16:16
So you're saying that the invalidity decision and the unpatentability decision—
16:22
Yes.
16:23
—unpatentability only becomes—has any meaningful effect when cancellation is—when the thing is canceled.
16:31
Appellant Attorney
That's exactly right.
16:32
And that's this court's E-plus case, Your Honor, and the In re Bingo case, and the Fresenius case.
16:39
Judge Prost
Well, they were never confronted with the issue of whether it's a difference between cancellation or final judgment.
16:44
Appellant Attorney
Well, In re Bingo, I know it's non-precedential, but it's a judge-rich decision.
16:47
It actually did address the question of cancellation, that until cancellation,
16:52
subject matter in the patent still exists.
16:55
So I disagree with that characterization.
16:57
And with respect to—I certainly don't mean to be throwing any stones with respect to the way in which Liquidia has litigated this case,
17:06
but those are strategic decisions.
17:09
And under Ackerman, a party's strategic decisions and the place where they find themselves in
17:14
is something to be considered in terms of equity, which Judge Cunningham's question had to do with.
17:20
Judge Prost
Well, let's speak of equity.
17:22
Let's go back to maybe her point.
17:23
So I'll let her.
17:24
Judge Cunningham
Yeah, I have one other question before we switch to where Judge Prost wants to go.
17:28
Is there any pertinent legislative history that supports drawing a distinction between invalidity and unpatentability in this case?
17:36
Appellant Attorney
I didn't see anything specific in the legislative history aside from the actual statutory language that was approved.
17:44
So 318B talks about unpatentability and how the effect is cancellation,
17:49
whereas 21 U.S.C. 355, alphabet soup, says when the Federal Circuit finds invalidity off of a district court appeal,
18:03
that has immediate effect that very day.
18:07
And so Congress presumably was aware of these statutes.
18:10
Remember, these are two different balances, one specific to brands and generics
18:15
and the other for all members of the public and patent owners.
18:20
And there was a choice made in that statutory language such that if you decide to go IPR route,
18:28
you are on your own and you have to wait for cancellation.
18:31
This is the law.
18:32
Whereas if you go hatch waxman, you have the opportunity to take advantage of if there's an affirmance
18:39
or a finding of invalidity by this court, that day that's operative.
18:44
And that was known and understood.
18:48
Judge Prost
I'm well into my time.
18:50
I apologize.
18:50
No, no, no.
18:50
Well, this is our time.
18:51
Not your time.
18:52
We're going to be very generous with you.
18:54
I'm happy to talk as long as you'd like to.
18:55
All right.
18:56
What about the authority?
18:58
I mean, leaving aside the basis for what the district court said about issue preclusion,
19:03
what about just a regular 60B5?
19:07
The Supreme Court has been very generous, most recently in Starbucks,
19:12
in terms of saying the equitable authority and discretion the district court has.
19:17
This is a circumstance of change circumstances.
19:20
There's certainly change circumstances.
19:21
You and I might disagree about the effect of that.
19:25
Why is this not within the broad equitable authority of the district court,
19:31
even absent cancellation, given that the final judgment, a mandate is issued in our case?
19:37
There's been no stay of the mandate.
19:40
The district court waited until that.
19:42
I don't know intentionally or unintentionally, but that's the way it turned out.
19:45
Why is that not sufficient for an affirmance?
19:47
Appellant Attorney
Well, Your Honor, I think I would respectfully submit that,
19:52
there is one and only one remedy that applies to all of Hatch-Waxman,
19:59
and it is regulated and mandated by Congress in E4A.
20:03
It is that order.
20:05
And that order submits that if the patent is unexpired and the patent has been infringed,
20:11
that that is the test for whether the E4A order ought to be maintained.
20:17
I would submit that there really is very little, if any,
20:22
equitable discretion in a district court
20:26
in the context of this statutory, congressionally mandated remedy.
20:30
Now, if there were a cancellation order...
20:33
Judge Prost
I mean, the court has cases, not our court, the Supreme Court,
20:37
which talks about shall, and even the word shall being overridden
20:41
by this necessary, important, equitable discretion allowed to the district court.
20:46
Understood.
20:47
Why is that not applied in this circumstance?
20:49
Appellant Attorney
Well, because this is a situation where Congress,
20:52
actually balanced the interests of branded and generic companies
20:56
and made exactly this determination, that this is the remedy.
21:01
Now, separately, I don't believe...
21:04
Judge Prost
We're talking about cancellation, a ministerial act,
21:07
which is completely non-discretionary.
21:11
So the issue here is the difference between our final judgment,
21:16
mandate having issued, and the impact of that,
21:20
whether that can have any impact in establishing...
21:22
a changed circumstance, without, before the cancellation,
21:27
i.e., a ministerial act, which is non-discretionary.
21:30
That's the issue, right?
21:31
Am I fairly stating it?
21:33
Appellant Attorney
I would submit that the...
21:35
Well, yes, I think I'll agree with that.
21:38
However, I would say that when we're thinking about equity,
21:42
you need to actually look at the equity.
21:45
And Judge Andrews' decision does not provide any information
21:49
about balancing any equity here.
21:52
So even though the liquidity had moved under 60B5 and 6,
21:57
Judge Andrews, the district court here,
22:00
did not balance any equity.
22:02
Judge Prost
So you're acknowledging that he would have had authority to do that
22:04
if he had made it...
22:06
I mean, we review for abuse of discretion.
22:08
If he had established, or at least under an abuse of discretion standard,
22:13
that there were equitable principles that need to be applied here.
22:16
Appellant Attorney
I would submit that the district court has no discretion under 60B5 or 60B6.
22:22
I think under 60B4, which is the injunction is now void,
22:28
that would be the mechanism once the patent is canceled
22:32
to go to Judge Andrews or a district court judge.
22:36
Because the operative...
22:38
That is the only changed circumstance is either the patent is expired
22:42
or the patent that supports the infringement finding is now gone away.
22:48
And that's 60B4 in my view, Judge.
22:53
Judge Prost
Thank you.
22:54
Appellant Attorney
Thank you so much for your time.
22:55
Thank you.
22:56
Judge Prost
We'll restore rebuttal time.
23:02
Now, before we start the clock writing,
23:04
I'll give you the same question as I gave your friend at the beginning
23:09
about this 28J letter,
23:12
which was very confusing to us in the context of what we're doing here.
23:16
Yes.
23:16
Do you have anything to add to what he said?
23:18
Appellee Attorney
Yes.
23:18
Good morning, Your Honors.
23:19
I'm May Piz Court, Sonia Suktlunk for Liquidity.
23:22
We do agree that the FDA issue is completely independent
23:28
of what's going on here.
23:30
Excuse me for a moment.
23:38
The regulatory exclusivity granted by the FDA a few weeks ago
23:45
prevents Liquidity from launching until May of 2025,
23:48
independent of any...
23:50
Judge Cunningham
But that's regardless, right?
23:51
Appellee Attorney
Independent of any patent issue that we have facing here.
23:54
The patent issue that we're facing here is if we believe the court should affirm
23:58
the district court's Rule 60 decision.
24:01
If you do, then Liquidity...
24:04
It's still prevented from launching until May of 2025,
24:09
unless and until that FDA decision is reversed by the district court of D.C.
24:13
So we believe the letter was not necessary
24:18
because it doesn't change anything that you need to decide
24:24
with respect to this issue.
24:26
Judge Cunningham
I thought that at one point we were asked to expedite this case potentially.
24:30
Yes.
24:30
Is that still a current...
24:34
Do you think we should expedite as well in light of this FDA letter
24:36
or does that have no impact?
24:38
Do you understand what I'm asking you?
24:39
No.
24:39
Appellee Attorney
I do understand.
24:40
I believe I understand.
24:42
UTC had asked to expedite this issue
24:45
because the injunction was then lifted based on the 793.
24:51
At that point in time, the FDA could have granted final approval to Liquidity.
24:59
The problem was that UTC, before that Rule 60 issue came down,
25:06
sued the FDA to prevent final approval
25:10
even though the FDA had not made a final administrative action
25:15
and that case was ultimately withdrawn by UTC
25:17
recognizing there was no final agency action
25:19
and their PI motion was denied because there was no PI administrative action.
25:24
But because of that filing of UTC to the FDA,
25:30
the FDA then delayed consideration of final approval of Liquidity,
25:36
as new drug application, or not a generic, a new drug application for eutrapia.
25:42
The FDA was then required by the D.C. District Court
25:48
to provide both sides and the court with three days' notice
25:52
before it would issue any decision.
25:55
And the court did that in early August,
25:58
said they were going to issue a decision,
25:59
and then the FDA reversed itself.
26:03
It had previously determined that UTC does not get this,
26:06
this extra exclusivity.
26:08
It reversed itself and imposed another exclusivity
26:12
that prevents now Liquidity from granting.
26:15
Judge Prost
I hate to be a pedestrian,
26:18
but all I care about is the impact of this case.
26:21
So the bottom line, following up on Judge Cunningham's,
26:23
is that even though we obviously try to decide cases as quickly as we can,
26:29
there's no, not an extra need in this case
26:33
because what we do here,
26:35
whether we affirm or revert,
26:37
is not going to have an immediate impact on who's on the market and who's not.
26:40
Correct.
26:41
And that, and what about in the interim with this case pending?
26:45
Do we have to keep watching over our shoulders to see what happens?
26:48
When do you expect stuff that might happen in the companion,
26:52
in the other case, that might have an impact on what we do?
26:56
Appellee Attorney
So I can't tell you timing definitively,
26:58
but as Your Honor acknowledged with counsel,
27:03
the cert petition will be brought up,
27:06
to the Supreme Court this month.
27:08
Judge Prost
No, we know about our case.
27:10
I was talking about the other case.
27:12
Appellee Attorney
Oh, you don't need to keep looking over your shoulder.
27:14
If you affirm this,
27:16
the way it stands now,
27:17
if you affirm and May shows up,
27:20
we get final FDA approval.
27:23
If the FDA's decision gets reversed prior to that,
27:27
by some summary judgment motion,
27:28
we get final FDA approval.
27:30
Judge Hughes
What's the next hearing or date in the District Court action?
27:34
Appellee Attorney
Which District Court, Your Honor?
27:37
There's a...
27:38
D.C.
27:39
The next hearing date I believe is December 5th.
27:42
So let me ask you this.
27:44
Judge Hughes
The Supreme Court's going to hear this in conference.
27:48
Let's assume they deny cert.
27:49
Correct.
27:50
And the solicitor, or not the solicitor,
27:53
the PTO promptly cancels the patent within two weeks.
27:57
Correct.
27:58
Why do we have to go through any of this here?
28:00
Appellee Attorney
You don't. It's moot.
28:01
And we did not ask to expedite this issue.
28:04
We actually noted in opposing the expedition motion,
28:06
that because the Supreme Court could deny cert
28:10
back when it was filed or now coming up in October,
28:13
this issue's rendered moot.
28:15
It's in our appeal brief.
28:16
Admittedly, it's in a footnote
28:17
because we're going to spend a lot of time on it.
28:18
And there's no...
28:19
Judge Prost
I mean, in theory, in a particular case,
28:22
there could be damages, but there's no damage.
28:25
You're not on the market.
28:26
We're not on the market.
28:27
Appellee Attorney
So there's nothing to go back for an assessment
28:29
by the District Court.
28:31
So...
28:32
And you took my thunder, Your Honor,
28:34
but my opening line was,
28:36
you don't need to decide this right now.
28:38
You can wait until at least the Supreme Court...
28:40
Judge Hughes
Well, do you have any expectation
28:41
that the PTO will promptly cancel this
28:45
after assuming cert is denied after cert is denied?
28:48
Or might they take six months,
28:50
in which case this issue would be relevant
28:53
because it might run you past that May date,
28:55
which you might get changed anyway.
28:57
Appellee Attorney
We believe, Your Honor,
29:00
once the Supreme Court denies the petition,
29:03
we are in contact with the Patent Office
29:05
and we will certainly reach out to you.
29:07
We'll reach out to the Patent Office, the PTAB,
29:08
and say this should be canceled.
29:09
But independent of that...
29:10
Judge Hughes
So let me just follow up.
29:12
December, you said the hearing in D.C. is in December.
29:16
Yes.
29:16
So we at least know that you're not getting
29:19
that May date changed before December.
29:21
Correct.
29:22
And so we'll know early October
29:24
whether the Supreme Court's going to hear it or not.
29:26
Correct.
29:27
So there is a two-month time between that
29:29
and this December date
29:33
for the Patent Office to cancel,
29:35
which would moot this case.
29:37
Correct.
29:38
Appellee Attorney
We believe the case is mooted.
29:40
We believe there's no basis for this case.
29:42
Judge Prost
Okay, I think we're going to start the clock
29:43
because this is really...
29:44
We're getting into the matter
29:45
and I don't want to take...
29:45
Yeah, I know, I know.
29:46
We're starting the clock
29:47
and we're not going to be that generous anymore.
29:49
Not on you, but on us.
29:51
I should have started the clock five minutes ago.
29:53
So, go ahead.
29:55
Appellee Attorney
Thank you, Your Honor.
29:56
We believe the District Court decision should be affirmed.
30:00
The affirmance of the PTAB 793 final written decision
30:04
by this Court,
30:05
rendered final the invalidity of the 793 patent.
30:09
And that's language from this Court's precedent in XY.
30:13
Judge Prost
Yeah, I know,
30:14
but you have got to acknowledge
30:17
that reliance on XY and invalidity
30:20
is something different.
30:21
The consequences of the difference
30:23
may be a matter of dispute,
30:25
but this is unpatentability.
30:27
And XY was an invalidity case.
30:31
That's...
30:32
That's...
30:33
We've not...
30:34
That holding doesn't...
30:35
That holding doesn't have as much power
30:38
as some might think,
30:39
including maybe Judge Andrews.
30:42
I believe that's incorrect with respect to XY.
30:45
Appellee Attorney
What XY was,
30:47
was you had a District Court case
30:49
and you had a pending IPR decision.
30:52
And the appeals were held...
30:55
The appeals were heard simultaneously.
30:57
Judge Prost
No, I understand, but...
31:00
I don't want to spend ten minutes having this debate.
31:03
Okay.
31:03
But it is different,
31:05
in my view at least,
31:06
not speaking with the panel,
31:08
if you have a pending case.
31:09
We do that all the time.
31:10
We decide one issue on an IPR
31:15
or on a District Court,
31:16
and then we issue a same opinion the same day,
31:18
usually non-PRAC,
31:19
and saying this one is governed by that one.
31:22
That's kind of an internal thing that we do.
31:26
I think this is different.
31:27
So if it's...
31:29
Except that I think this is different.
31:31
Okay.
31:31
So what is 60B5?
31:33
What does the District Court...
31:35
Isn't there a prudential mootness
31:38
or some principles of equity
31:42
and the power of the District Court
31:44
to do this based on changed circumstances?
31:47
Appellee Attorney
And we agree, Your Honor,
31:48
and that's exactly what 60B5 says.
31:50
If there's a change in circumstance
31:52
that the injunction is no longer equitable,
31:56
it should be lifted.
31:59
Eplus, Mendenhall,
32:01
a Supreme Court precedent,
32:02
and that's what we believe the Court did here
32:05
under two reasons.
32:07
One, yes, the Court did rely on XY,
32:09
but second,
32:09
and this is Appendix Page 4 and 5,
32:12
it spans Pages 4 and 5,
32:14
the District Court also found
32:15
that because of this Court's affirmance
32:18
of the PTAB decision,
32:20
the 793 patent is invalid
32:22
and therefore an injunction cannot be had
32:23
on an invalid patent.
32:25
So whether you look at the timing perspective of XY,
32:28
and I respectfully disagree,
32:30
and I won't change your opinion on that,
32:31
but with respect to the inequitable issues,
32:34
Liquidity is now in a position
32:36
to be the only party
32:40
that cannot launch a product
32:42
based solely on the 793 patent.
32:45
Counsel, I'm sorry, go ahead.
32:47
Judge Cunningham
And you know I already explored
32:48
some of the opposing counsel
32:49
that potential lack of equity.
32:52
But I do agree with Judge Prost
32:54
that I feel like in your briefing
32:55
you were a bit fast and loose
32:57
with the terminology
32:58
invalidity and unpatentability
32:59
and used those terms,
33:03
inaccurately at times
33:04
is the way I would phrase it.
33:05
What would you contend
33:07
are the only material differences
33:09
between unpatentability and invalidity
33:12
that would impact this case, if at all?
33:16
Appellee Attorney
None.
33:16
The only difference is that
33:18
one's a PTAB and one's a District Court.
33:21
And one statutorily requires cancellation.
33:27
Cancellation, as Your Honor pointed out,
33:29
is a ministerial act.
33:30
I know you disagree with XY,
33:32
but to answer Judge Cunningham's questions
33:34
about how we've used the language
33:35
invalidity and unpatentability,
33:37
I do want to address that.
33:39
In XY, and I'll quote it,
33:42
in XY, and this is page 1294 to 1295
33:45
of the XY decision,
33:47
when looking at the IPR decision,
33:50
this Court said that affirming the IPR decision
33:54
renders final a judgment
33:56
on the invalidity of the asserted patents.
33:59
Remember, in the District Court case,
34:01
the Court did not affirm an invalidity
34:05
of the District Court case.
34:06
It rendered final an invalidity
34:08
or unpatentability of an IPR decision.
34:11
And that's why there is no distinction
34:14
between the term invalidity
34:15
and unpatentability for Rule 60 purposes.
34:18
The case that UTC cites in its reply brief
34:22
is in-ray cyclobenzaprine.
34:24
That case, they cite footnote 7,
34:27
that talked about the difference
34:29
between invalidity from a District Court
34:31
and patent prosecution unpatentability,
34:34
because in that situation,
34:35
there's no issued patent yet.
34:37
In the in-ray bingo case,
34:40
again, in that case, it was a re-exam.
34:43
And the only thing that happened in that re-exam
34:45
was that the examiner confirmed a rejection
34:47
of one of the attacked claims.
34:50
That case was on appeal to the Board.
34:52
It didn't even reach to where we were here.
34:55
And in that situation...
34:56
Judge Cunningham
You would at least agree with us, though,
34:57
that there's a different burden of proof
34:59
with respect to unpatentability,
35:00
versus invalidity, different forms.
35:02
Like, you'll agree with those bases?
35:04
Appellee Attorney
Absolutely.
35:04
But those...
35:05
I'm sorry.
35:06
Those differences are not meaningful here,
35:08
because through an IPR decision,
35:12
you can go to the PTAB
35:15
under a different burden of proof,
35:17
but you still have to get it affirmed here.
35:19
And once it's affirmed here,
35:21
and that's the situation that we're talking about.
35:23
We're not relying on the PTAB decision by itself.
35:27
And Judge Andrews did not rely
35:28
on the PTAB decision by itself.
35:30
It was affirmed by this court.
35:32
And there's not a single case that UTC cites,
35:35
or we can find,
35:36
that an injunction was maintained,
35:40
equitable or otherwise...
35:42
Judge Prost
Well, it's affirmed here.
35:43
You're not talking about just the decision,
35:44
the mandate issues.
35:45
Correct.
35:46
That's what we key for the mandate issue.
35:48
Yes.
35:48
And the other side has the ability
35:50
to ask for a stay of the mandate.
35:53
And I don't even...
35:54
I know a stay wasn't granted.
35:55
I don't know whether...
35:56
I don't think they filed one.
35:57
Can I go back to the mootness thing?
35:59
Isn't this an example of...
36:00
But it's capable of repetition
36:03
and evading review.
36:05
I mean, wouldn't there be...
36:06
I'm certainly going to ask your friend,
36:08
because this is his appeal.
36:09
But isn't there a basis
36:12
for not mooting this case out,
36:15
notwithstanding what all is going on elsewhere?
36:17
Appellee Attorney
I think it would be very rare, Your Honor,
36:20
because usually in IPRs and district court case
36:23
co-pending at the same time,
36:24
the district court...
36:25
If the IPR is instituted,
36:27
most district courts in the country
36:29
do stay the district court action
36:31
until the IPR is filed.
36:33
The problem that we had here
36:34
is that there's a 30-month stay.
36:36
Had Liquidia moved to stay the district court,
36:40
UTC certainly would have filed a motion
36:42
to extend the 30-month stay
36:44
until that issue was decided.
36:46
So I think, Your Honor,
36:49
it is moot
36:50
and probably can only come up
36:53
in this type of situation,
36:55
which may deal with Hatch Waxman.
36:57
And in our understanding,
36:58
this is the first time
37:00
this type of issue has come up.
37:03
Because usually,
37:05
once the decision is affirmed
37:08
and the mandate issues from an IPR,
37:11
no party asks to maintain an injunction
37:16
because there is no patent
37:19
that can be had
37:21
that would equitably allow UTC
37:23
Judge Prost
to maintain their injunction.
37:25
And your position is that cancellation
37:28
doesn't matter because it's trumped
37:30
by the fact that this is just a ministerial act.
37:34
Correct.
37:34
So it has no legal consequence.
37:35
You didn't cite Arthrex.
37:37
I mean, Arthrex does say it's ministerial.
37:39
We cited...
37:40
I forget the name of the case.
37:42
I believe it was Judge Hughes.
37:43
Yes.
37:43
Yeah, it was a Yonku case.
37:44
Actually, that was a little different.
37:46
Arthrex is, I think, more apt site.
37:48
Appellee Attorney
But we do believe it is a ministerial act.
37:51
We've cited cases here.
37:52
We've cited cases before the district court.
37:54
And I believe Judge Hughes mentioned this.
37:56
Because I know asking to me,
37:57
but asking to council as well,
37:59
that we are at the mercy...
38:02
If the injunction is not lifted
38:05
and not affirmed,
38:08
liquidity is at the mercy of the patent office
38:11
and UTC will claim that their injunction
38:14
could last forever
38:16
until the patent office
38:19
administratively cancels those claims.
38:21
That cannot be right.
38:23
And we are at that situation right now
38:25
because there is no reason why,
38:27
and we don't know why,
38:28
the PTO director has not...
38:29
Judge Hughes
Well, if that's what the statute requires,
38:32
then you are at the mercy of the PTO
38:35
and you have other remedies,
38:36
such as perhaps a mandamus petition
38:39
ordering them to cancel it
38:41
if they have a duty to do it and don't.
38:44
Appellee Attorney
But we don't believe the statute,
38:45
and if you're referring to the Hatch-Waxman statute,
38:47
requires that.
38:48
Because the Hatch-Waxman statute
38:49
doesn't say claim cancellation.
38:52
And Judge Andrews aptly pointed out,
38:54
and council didn't address this,
38:56
but the Hatch-Waxman statute
38:58
requires a patent to be infringed.
39:01
There is no 793 patent to be infringed.
39:05
How do we know that?
39:06
Council begrudgingly conceded
39:10
upon examination
39:11
that they would not assert this patent
39:13
against another generic.
39:15
They, in fact, withdrew their complaint.
39:18
It's a completely separate action
39:19
they filed against us in the 793 patent.
39:22
They withdrew that complaint.
39:23
If UTC believes
39:25
what they stand here and say today,
39:28
that the 793 patent is still valid,
39:30
is still enforceable,
39:32
still can be sued upon,
39:34
then there would have been no reason
39:36
why they would have dismissed
39:37
their second Hatch-Waxman case
39:39
against us on the 793,
39:41
x, y, or otherwise.
39:42
Judge Cunningham
Do you contend that we need to find
39:44
that issue preclusion applies
39:45
in order to affirm the district court?
39:47
Appellee Attorney
No, I think you can find,
39:48
you can affirm based on the equities.
39:51
We believe that the court's,
39:52
the district court's issue preclusion
39:55
was correct.
39:56
All the cases that UTC cites.
39:59
Judge Prost
Would there have to be
40:00
a different kind of analysis
40:01
provided by the district court,
40:03
or could we do that on our own?
40:06
Appellee Attorney
Which issue?
40:06
On the equity issue?
40:07
Yes.
40:08
Judge Prost
Your friend, I think,
40:10
suggested at one point,
40:11
even not agreeing with that,
40:13
but that a remand might be necessary.
40:14
Appellee Attorney
We disagree.
40:16
Analysis of equity.
40:17
We disagree because
40:17
the district court's opinion
40:20
addresses the invalidity
40:21
of the 793 patent.
40:24
Independent,
40:25
of,
40:25
there's two paragraphs.
40:26
Paragraph on appendix page four,
40:29
under the argument section
40:30
or the analysis section,
40:32
the first paragraph deals with
40:33
x, y, and issue preclusion.
40:35
The next paragraph,
40:36
which spans pages four and five
40:38
of the appendix,
40:40
address the invalidity.
40:42
And under that,
40:43
that's the equitable issue.
40:45
And so we don't think
40:46
there's any other remand
40:48
for further determination
40:50
or fact finding to be had.
40:51
There are no other facts to be had.
40:55
Um,
40:55
any other questions,
40:57
Your Honor?
40:58
Thank you.
40:58
Oh, I see.
40:59
Thank you.
41:11
Judge Prost
So could you just spend
41:13
30 seconds or whatever?
41:14
Do you agree with the mootness points
41:15
that were made early on
41:17
in your friend's discussion,
41:18
that this would be moot?
41:19
Appellant Attorney
I, I agree with,
41:21
with some of the concerns
41:22
that you expressed,
41:22
Judge Burris,
41:23
not with the way in which
41:24
my learned friend,
41:25
uh,
41:26
addressed them.
41:27
Judge Hughes
So if the Supreme Court denies cert
41:29
and the PTO cancels this patent
41:32
a week later,
41:33
are you not going to dismiss this appeal?
41:35
Appellant Attorney
Oh, I think at that point,
41:37
with a,
41:38
can,
41:39
with a,
41:39
with a canceled patent,
41:41
I agree.
41:41
I think that at that point
41:43
we're moot.
41:43
Having said that,
41:44
No, no, no,
41:44
that's not the question I asked.
41:46
And I would just,
41:46
Judge Hughes
I would dismiss.
41:47
The question I asked is,
41:47
are you going to come in and dismiss it?
41:48
Appellant Attorney
We will dismiss the appeal.
41:49
Okay.
41:49
We would dismiss the appeal
41:51
in that circumstance.
41:52
Having said that though,
41:53
um,
41:54
Judge Hughes
And,
41:55
and,
41:55
and like we said,
41:56
we,
41:56
we know that
41:58
you have another period
41:59
until May of 25
42:01
and that nothing's going to happen
42:03
in district court in D.C.
42:04
until at least December.
42:07
Appellant Attorney
So there's a,
42:07
Yes.
42:08
Judge Hughes
there's a big window there
42:09
for the patent office
42:11
to cancel this.
42:12
There,
42:12
there is a,
42:13
Who knows,
42:13
or a big government agency,
42:14
you know,
42:15
whether they're going to cancel immediately.
42:17
I assume he's going to call
42:18
whoever he knows there
42:19
and say,
42:20
cancel this.
42:20
Appellant Attorney
I'd imagine he'd call
42:22
many people he knows there.
42:23
Yeah.
42:23
But,
42:24
but yes.
42:25
And,
42:25
you know,
42:26
I think this is,
42:27
however,
42:27
the,
42:28
just because something's a ministerial act
42:30
doesn't mean it's de minimis.
42:31
It,
42:32
that has rights.
42:33
Well, I understand that.
42:37
Judge Hughes
Right,
42:38
but there are,
42:38
Judge Prost
you acknowledge
42:39
there are Supreme Court cases
42:40
that very much
42:42
give a lot of oomph
42:43
to the bill,
42:45
the authority of the district court
42:46
and to exercise equitable discretion.
42:50
I agree with that,
42:52
Judge Probst,
42:52
but I can't.
42:53
So wouldn't this fall
42:55
into the same bucket
42:56
as Starbucks,
42:57
and I can't remember
42:58
that other case
42:58
in the Supreme Court,
42:59
but even when the Congress said shall,
43:02
it could still be trumped
43:03
by a district court's discretion.
43:05
Do you agree with that?
43:07
Unknown
I,
43:07
Appellant Attorney
I agree that there are circumstances
43:09
where that's appropriate.
43:11
I think those issues,
43:12
those cases
43:14
didn't involve a situation
43:15
where in order to do equity,
43:17
the court would have to run ramshod
43:19
over the two statutes,
43:22
318B and 21 USC 355,
43:25
as well as black letter jurisprudence
43:28
from this court,
43:28
namely XY and Fresenius
43:30
and so forth.
43:32
I mean,
43:32
this is doing just,
43:33
doing equity,
43:35
and,
43:36
and moreover,
43:36
there is no,
43:37
even,
43:37
even if we're thinking
43:38
that equity,
43:39
equity could trump the shall,
43:41
which,
43:42
you know,
43:42
okay,
43:43
Judge Andrews did none
43:45
of that equitable analysis,
43:46
so at the very minimum,
43:47
we ought to have a remand here
43:48
to allow Judge Andrews
43:50
to actually do
43:51
the equitable analysis
43:52
that presumably exists here.
43:55
So,
43:56
I just want to address
43:58
a few things
43:59
that came up
43:59
in my colleague's argument.
44:01
I,
44:01
I will try not to take
44:02
any more time than necessary.
44:04
Packet itself
44:05
went ahead at 1386
44:08
and clarified that XY
44:10
was talking about
44:13
unpatentability
44:13
in,
44:14
in connection with
44:16
IPR decisions.
44:17
IPR decisions under Section 318B
44:20
are all about unpatentability,
44:22
not about invalidity,
44:23
and I found it telling that...
44:25
Judge Prost
Why is that,
44:25
what is the consequence
44:26
of that distinction
44:27
for what we're deciding here?
44:29
Well,
44:29
because...
44:30
Other than there's a cancellation
44:31
provision in the statute.
44:32
Appellant Attorney
Well,
44:32
because it's,
44:33
it,
44:33
unpatentability
44:34
is absolutely different
44:36
from validity
44:37
for purposes
44:38
of issue preclusion
44:39
and for purposes
44:40
of finality here.
44:43
There,
44:43
the,
44:44
the district court's decision
44:45
was absolutely final
44:46
and it found
44:48
not invalid
44:49
and that's
44:50
what trumps here.
44:51
That's,
44:51
that's a sacrosanct decision
44:53
by the district court.
44:54
The E4A order
44:55
was in place,
44:56
the judgment
44:56
was executed.
44:57
And so,
44:58
that is final
44:59
and,
45:00
and to disrupt that
45:01
based upon
45:02
a lower standard
45:03
you know,
45:05
unpatentability finding,
45:06
the issues aren't even
45:07
the same here.
45:08
This is blonder tongue.
45:09
So,
45:10
I think it does matter,
45:12
Your Honor,
45:12
very much.
45:13
Judge Prost
But that issue
45:13
is taken care of.
45:14
If they had issued
45:15
the cancellation,
45:16
it would be trumped
45:17
and there's no dispute
45:18
about that.
45:18
So it's not,
45:19
there's nothing to be said
45:20
about the different standards
45:22
and substantial,
45:24
you know,
45:25
we all agree,
45:26
we're all on the same page.
45:27
Unknown
I,
45:27
Appellant Attorney
I hope so.
45:28
I thought I heard
45:28
my colleagues stand here
45:30
and tell this court
45:30
it's moot today.
45:32
And,
45:32
and it,
45:32
it is absolutely not.
45:34
There is,
45:34
there is nothing
45:35
to,
45:36
that,
45:36
I,
45:38
I hope that we're all
45:39
on the same page,
45:40
Your Honor,
45:40
with respect to
45:41
the cancellation
45:42
is the key here.
45:43
No,
45:43
no,
45:43
no,
45:43
Judge Prost
not on this respect
45:44
to the cancellation
45:45
but on the extent
45:46
to which
45:48
the difference
45:49
between unpatentability
45:50
and invalidity,
45:51
bottom line is
45:53
your view
45:54
is one requires
45:54
a cancellation.
45:55
There's nothing
46:01
about the fact
46:01
that there are
46:02
different proceedings
46:03
and different standards
46:04
of proof.
46:05
Appellant Attorney
Well,
46:05
post cancellation
46:06
that's where you have
46:08
a collapse,
46:08
right?
46:09
That's where you have
46:09
the exhaustion.
46:11
Post cancellation,
46:12
yes.
46:12
And in that case
46:13
absolutely yes.
46:14
What I saw
46:15
in the papers though
46:16
and what I heard
46:17
from my learned friend
46:19
was when,
46:20
you know,
46:21
Judge Cunningham
46:21
pressed him saying
46:22
you seem to be playing
46:24
these a little fast and loose.
46:25
He said,
46:25
oh no,
46:25
no,
46:26
no,
46:26
no,
46:26
I'm absolutely not.
46:27
He absolutely was.
46:29
Unpatentability
46:29
and invalidity
46:30
are two very different things
46:31
under very different
46:32
statutory regimes.
46:34
That's my point,
46:34
Judge.
46:35
With respect
46:36
to
46:39
APPX 4
46:39
through 5
46:40
I would encourage
46:41
the courts
46:41
to take a look at that.
46:42
This is
46:42
the district court's
46:44
Rule 60B order.
46:45
I think you'll find
46:47
that there was
46:48
absolutely no
46:49
assessment
46:49
of the equities here.
46:51
It was ministerial
46:52
in the sense
46:53
that Judge Andrews
46:54
saw
46:56
and said,
46:56
that's enough
46:57
and off
46:58
we go to the races.
46:59
And that's just
47:00
not the right analysis.
47:02
It's just,
47:02
it's an error of law
47:03
and entitled
47:04
to de novo review.
47:05
I would request
47:06
that the court
47:07
reverse
47:07
or at least remand
47:10
to
47:11
allow
47:11
Judge Andrews
47:12
if the court believes
47:13
that he has
47:14
the equitable authority
47:15
to
47:16
modify
47:17
this injunction
47:17
to do the correct analysis.
47:19
Judge Prost
Thank you.
47:20
Thank you all very much.
47:21
And the case
47:22
is submitted.
47:23
That concludes
47:24
our proceeding.