UNITED STATES PATENT AND TRADEMARK OFFICE
`________________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`________________________
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`
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`NESTLÉ USA, INC.
`
`Petitioner
`
`v.
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`STEUBEN FOODS, INC.
`
`Patent Owner
`
`
`________________________
`
`IPR2015-00249
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`U.S. Patent No. 6,481,468
`________________________
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`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION TO
`STRIKE PART OF PATENT OWNER’S RESPONSE AND EXHIBIT 2097
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`
`
`
`
`
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`
`
`________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`________________________
`
`
`
`NESTLÉ USA, INC.
`
`Petitioner
`
`v.
`
`STEUBEN FOODS, INC.
`
`Patent Owner
`
`
`________________________
`
`IPR2015-00249
`
`U.S. Patent No. 6,481,468
`________________________
`
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION TO
`STRIKE PART OF PATENT OWNER’S RESPONSE AND EXHIBIT 2097
`
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`
`
`
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`
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`
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`Petitioner’s motion to strike—and its motion to disqualify Mr. Mansour filed
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`on the same day—are Nestlé’s transparent and last-ditch attempts to avoid having to
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`support its mistaken assertion that 21 C.F.R. § 178.1005 applies to all foods
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`regardless of whether they are aseptically packaged. Nestlé simply cannot justify its
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`position, and the arguments and evidence it seeks to now strike—rather than respond
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`to—expose that fact. To date, despite having had numerous opportunities before
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`this Board, the district court, and the Federal Circuit to do so, Nestlé has not
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`identified a single shred of evidence that would suggest that § 178.1005 applies to
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`all foods regardless of whether they are aseptically packaged. It would be highly
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`prejudicial to Patent Owner to permit Nestlé to avoid having to answer for its
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`baseless assertions by granting a motion to strike.
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`I.
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`Petitioner has not demonstrated that it is entitled to the exceptional
`remedy it seeks because the arguments and evidence it seeks to strike do
`not exceed the proper scope of briefing in this proceeding.
`Petitioner argues that Sections III and IV.A and the declaration of Mr.
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`Mansour should be stricken in their entirety because they allegedly exceed the scope
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`of Patent Owner’s permitted briefing in defending its patent.
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`Section III of Patent Owner’s Response is entitled “Claim Construction.” In
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`that section, Patent Owner sets forth the Federal Circuit’s claim construction of
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`“aseptic,” which was issued after this proceeding was initially instituted. Patent
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`Owner then concludes that under that construction of “aseptic,” the claim term
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`1
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`
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`“aseptically disinfecting” means “disinfecting to the FDA level of aseptic in
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`compliance with the FDA’s regulations governing aseptic packaging.” Patent
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`Owner is not making a “claim construction argument”—it is simply setting forth the
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`Federal Circuit’s binding claim construction. Nestlé’s attempt to strike this
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`argument shows how far it will go to avoid having to take a position as to which
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`regulations govern aseptic packaging.
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`Section IV.A is entitled “Petitioner has not carried its burden to establish that
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`the cited prior art teaches compliance with the FDA regulations governing aseptic
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`packaging.” In that section, Patent Owner explains that under the Federal Circuit’s
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`claim construction, Nestlé was required to demonstrate that the prior art complies
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`with the FDA regulations governing aseptic packaging. Such a demonstration
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`requires the Board to determine which regulations govern aseptic packaging. During
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`the Federal Circuit oral argument in this proceeding, Judge Hughes made clear that
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`determining which FDA regulations are related to aseptic packaging is not claim
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`construction. The following exchange took place:
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`MS. CARRON: Well, opposing counsel has asserted that the
`hydrogen peroxide residual is an aseptic standard, is an aseptic
`regulation, but it – opposing counsel, based on the briefs, has not
`challenged this Court’s construction of aseptic, except for it has
`asserted that the Court should not have concluded that the hydrogen
`peroxide residual does not meet its construction, but it hasn’t – hasn’t
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`2
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`
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`
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`challenged the underlying construction, at least based on the briefs
`before this Court.
`…
`Is that really a claim construction issue? I
`[Judge Hughes]:
`mean, I tend to agree with you that they’re not challenging the claim
`construction that aseptic means FDA standards of aseptic, but whether
`or not the regulation itself – the residual regulation, 21 [C.F.R.
`178].1005, I think, is an aseptic standard or not; is that really a claim
`construction issue or is that our interpretation of what 1005 is for?
`MS. CARRON: Your Honor, it is claim construction. […]
`[Judge Hughes]: What if we just got it wrong and 1005
`actually is the only point of the residual regulation is the use of
`hydrogen peroxide in aseptic systems and sterilization, would it then be
`an aseptic regulation under our construction?
`MS. CARRON:
`If Your Honor concluded that the regulation,
`after looking at the specification of all history and regulation –
`[Judge Hughes]: See this is where I’m a little confused by your
`argument. Now, I don’t think it – I’m not sure it really matters much,
`because I’m not sure we got it wrong, but I don’t know why it’s a claim
`construction issue of what the regulation is.
`The claim construction is what they mean that term “aseptic
`processing” to be or “aseptic.” We said that means FDA regulations
`relating to it, then we have to look at FDA regulations and put them
`in certain boxes. But that’s not claim construction, that’s construing
`what regulations are for.
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`Ex. 2099 at 6:9-9:4 (emphasis added).
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`3
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`As the foregoing exchange makes plain, Nestlé argued to the Federal Circuit
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`that determining which FDA regulations govern aseptic packaging under the Federal
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`Circuit’s claim construction is a matter of claim construction. But Judge Hughes
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`stated that it was not. Determining which FDA regulations govern aseptic packaging
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`is not claim construction, and the declaration of Mr. Mansour—an expert in FDA
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`regulatory law—brings clarity to that issue. Nestlé wants to avoid clarity on this
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`issue at all costs—otherwise it would simply respond so that the Board could weigh
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`the evidence and arguments.
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`Nestlé’s challenge is based on its argument that Patent Owner’s claims are
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`unpatentable as obvious under 35 U.S.C. § 103. “It is elementary in patent law that,
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`in determining whether a patent is valid … the first step is to determine the meaning
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`and scope of [the claims].” Nat’l Steel Car, Ltd. v. Canadian Pac. Ry. Ltd., 357 F.3d
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`1319, 1334 (Fed. Cir. 2004) (internal quotations omitted). Once the claims have
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`been construed, “a court must compare the prior art to the claims as one of ordinary
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`skill in the art at the time of the invention would have done.” Id. “This comparison
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`involves fact-finding” such as determining the differences between the prior and
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`claims at issue. Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 714 (Fed. Cir.
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`1998).
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`Here, the Federal Circuit construed the term “aseptic” according to the binding
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`lexicography in the patent to mean the FDA level of aseptic, which is confined to
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`4
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`
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`the regulations governing aseptic packaging. Because the claims require compliance
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`with the FDA’s regulations governing aseptic packaging, the Board must determine
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`whether the prior art teaches systems or methods that comply with such regulations.
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`Steuben’s Section IV.A sets forth Patent Owner’s position with respect to how the
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`properly construed claims compare to the prior art. Contrary to Nestlé’s argument,
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`that section is not challenging the Federal Circuit’s claim construction. To be clear,
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`Patent Owner agrees with the Federal Circuit that the proper construction of
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`“aseptic” is the FDA level of aseptic.
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`Nestlé’s motion reaches to try to support its argument that determining which
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`FDA regulations govern aseptic packaging is part of claim construction. But the
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`Federal Circuit already expressly rejected that argument, and the two cases cited by
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`Nestlé do not revive its argument. Nestlé asserts (at 3) that Key stands for the
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`proposition that “whether ‘pharmaceutically effective amount’ included certain
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`FDA regulations is claim construction.” Key, 161 F.3d at 718. But the Key court
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`was simply stating that it was not error for the trial court to have considered what
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`the FDA considered a “pharmaceutically effective amount” of a drug in determining
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`how it should construe the claim term “pharmaceutically effective.” Id. at 718.
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`Nestlé’s citation (at 3) to Liberty Ammunition, Inc. v. United States, 835 F.2d
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`1388 (Fed. Cir. 2016) is similarly misplaced. In Liberty, the Federal Circuit looked
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`to a NATO standard concerning the size of ammunition and decided to construe the
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`5
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`term “reduced area of contact” in accordance with that standard. In Liberty, the
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`Federal Circuit read a particular NATO standard into the claim. Id. at 1396-97. Such
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`is not the case here, where the Federal Circuit construed “aseptic” to require
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`compliance with the governing FDA aseptic regulation, but expressly stated that
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`determining which regulations govern is not part of its claim construction.
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`Nestlé also argues (at 3) that “Patent Owner has consistently treated whether
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`the term ‘aseptic’ incorporates 21 C.F.R. § 178.1005(d) as claim construction.” But
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`both the Board and the Federal Circuit declined to expressly read that regulation, or
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`any other FDA regulation, into the claim construction, which was set through
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`binding lexicography. Instead, the Federal Circuit construed “aseptic” to mean the
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`FDA level of aseptic, which it stated requires compliance with the FDA’s regulations
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`governing aseptic packaging. Steuben’s earlier arguments notwithstanding, the
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`Federal Circuit’s claim construction governs now. Under that construction, the
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`FDA’s hydrogen peroxide residual standard applies in the context of the hydrogen
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`peroxide based prior art because § 178.1005 is an FDA regulation governing the use
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`of hydrogen peroxide in aseptic packaging.
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`In an attempt to transform Section IV.A of Patent Owner’s Response into a
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`claim construction argument, Nestlé argues (at 2-3) that “[i]n footnote 1 of its
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`Response, Patent Owner suggests that, despite the Board’s order, it is entitled to brief
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`claim construction because it is addressing the patentability of newly instituted
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`6
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`
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`
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`challenges to claims 20-23.” But Nestlé has misrepresented that footnote, which it
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`notably declines to quote. Footnote 1 of Patent Owner’s Response actually states:
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`The Board’s August 10, 2018 Order (Paper 86) states (at 2) that it
`considers those Papers from IPR2014-01235 to be “relevant to the
`instant proceeding.” Patent Owner respectfully submits that while the
`Papers may in fact be relevant, they should not preclude Patent Owner
`from addressing the patentability of the newly instituted grounds
`challenging claims 20-23 for the first time before the Board under the
`Federal Circuit’s claim construction.
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`PO Response at 7, n.1. Contrary to Nestlé’s assertion, Patent Owner did not state
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`that it was entitled to challenge the Federal Circuit’s claim construction.
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`II.
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`Patent Owner is not collaterally estopped.
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`Nestlé argues (at 4) that Patent Owner is “collaterally estopped” from
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`rearguing claim construction in this proceeding. As set forth above, Steuben is not
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`arguing claim construction—it accepts the Federal Circuit’s construction of
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`“aseptic,” which requires compliance with the FDA regulations governing aseptic
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`packaging. Accordingly, Nestlé’s argument should be rejected for that reason alone.
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`But, in any event, whether Steuben is “collaterally estopped” is an argument
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`that Nestlé should raise in its Reply. The Revised Trial Practice Guide states:
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`If a party believes that a brief filed by the opposing party raises new
`issues, is accompanied by belatedly presented evidence, or otherwise
`exceeds the proper scope of reply or sur-reply, it may request
`
`7
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`
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`authorization to file a motion to strike. Alternatively, a party may
`request authorization for further merits briefing ….
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`Trial Practice Guide Update at 17. Nestlé’s collateral estoppel argument does not fit
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`within the scenarios set forth in the Revised Trial Practice Guide.
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`Steuben has never had a full and fair opportunity to litigate whether Nestlé
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`has any support for its assertion that the FDA’s residual hydrogen peroxide
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`requirement applies to all foods regardless of whether they are aseptically packaged.
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`Nestlé only raised that argument after the record was closed in IPR2014-01235, and
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`then again during the Federal Circuit briefing. Aside from the fact that the argument
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`is baseless, it was improper for Nestlé to inject it at that stage in the proceedings. At
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`the Federal Circuit argument in this proceeding, Nestlé was specifically challenged
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`to identify any evidence in the record to support its position that § 178.1005 applies
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`to non-aseptic processing, but Nestlé had no answer. Ex. 2099 at 11:13-13:4. There
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`is no evidence because Nestlé’s baseless argument was not timely raised. Nestlé has
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`since steadfastly avoided responding to any challenge to its argument that the FDA’s
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`residual hydrogen peroxide requirement applies to all foods regardless of whether
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`they are aseptically packaged—likely because no support exists.
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`III. Mr. Mansour’s declaration should not be stricken.
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`Mr. Mansour, an FDA regulatory law expert, offers his expert opinion on the
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`manner in which the FDA regulates food additives. His opinion demonstrates that
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`8
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`Nestlé cannot support its argument to the Federal Circuit that the FDA’s residual
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`hydrogen peroxide requirement applies to all foods regardless of whether they are
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`aseptically packaged. Rather than respond, Nestlé has launched a full-scale assault
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`on Mr. Mansour’s testimony by arguing that he should be disqualified, and that his
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`declaration should be stricken while reserving the right (at 9, n.2) to file a motion to
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`exclude if its two pending motions do not achieve the result it so desperately desires.
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`Nestlé’s argument is that Mr. Mansour’s declaration should be stricken
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`because he is not qualified to serve as an expert i.e., it should be stricken because it
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`is entitled to no weight. But the Revised Trial Practice guide makes clear that further
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`briefing—as opposed to a motion to strike—is appropriate “when the party wishes
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`to address the proper weight the Board should give to the arguments or evidence.”
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`Trial Practice Guide Update at 17.
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`IV. Nestlé has not established that it is entitled to the “exceptional” relief it
`seeks.
`Nestlé’s burden on its motion to strike is lofty because the Revised Trial
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`Practice Guide explains that its requested relief is an “exceptional remedy”:
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`[S]triking the entirety or a portion of a party’s brief is an exceptional
`remedy that the Board expects will be granted rarely. In some cases,
`however, whether an issue is new or evidence is belatedly presented
`may be beyond dispute, or the prejudice to a party of waiting until the
`close of the evidence to determine whether new issues or belatedly
`presented evidence has been presented may be so great, that the facts
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`9
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`
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`may merit considering a motion to strike. For example, where a reply
`clearly relies on a new theory not included in prior briefing, and where
`addressing this new theory during oral hearing would prejudice the
`opposing party, striking the portion of the brief containing that theory
`may be appropriate.
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`Trial Practice Guide Update at 18 (emphasis added).
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`Nestlé cannot argue that the arguments and evidence it seeks to strike raise
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`new issues. Likewise, Nestlé cannot possibly argue that it would be prejudiced by
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`having to respond to Steuben’s arguments and evidence concerning the FDA’s
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`governing aseptic regulations. That argument and evidence was only made
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`necessary due to the fact Nestlé—without any factual basis for doing so—argued to
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`the Federal Circuit that 21 C.F.R. § 178.1005 applies to all foods regardless of
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`whether they are aseptically packaged. While Nestlé would prefer to not have to
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`offer a factual basis for its argument—that does not amount to prejudice. It is Patent
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`Owner who has been prejudiced by Nestlé’s belated and baseless argument. Nestlé’s
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`motion should be denied.
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`Date: November 19, 2018
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`
`
`
`
`/Thomas J. Fisher/
`Thomas J. Fisher (Reg. No. 44,681)
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`10
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies service of PATENT
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`OWNER’S OPPOSITION TO PETITIONER’S MOTION TO STRIKE PART OF
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`PATENT OWNER’S RESPONSE AND EXHIBIT 2097 on the counsel of record
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`for the Petitioner by filing this document through the PTAB E2E System as well as
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`delivering a copy via electronic mail to the following addresses:
`
`Thomas H. Jenkins
`tom.jenkins@finnegan.com
`
`Virginia Carron
`virginia.carron@finnegan.com
`
`Tyler M. Akagi
`tyler.akagi@finnegan.com
`
`Kevin D. Rodkey
`kevin.rodkey@finnegan.com
`
`
`Date: November 19, 2018
`
`
`
`
`
`
`
`
`
`/Thomas J. Fisher/
`Thomas J. Fisher (Reg. No. 44,681)
`Counsel for Patent Owner
`Steuben Foods, Inc.
`
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`
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`
`
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