`
`Case: 17-1099 Document: 24 Page: 1 Filed: 12/27/2016
`No. 2017-1099
`In the
`United States Court of Appeals
`for the Federal Circuit
`
`
`FRESENIUS KABI USA, LLC,
`
`v.
`FERA PHARMACEUTICALS, LLC; OAKWOOD LABORATORIES, LLC,
`Defendants-Appellants,
`
`
`Plaintiff-Appellee,
`
`MAIA PHARMACEUTICALS, INC.,
`
`
`_______________________________________
`Appeal from the United States District Court
`for the District of New Jersey, Case No. 2:15-cv-03654-KM-MAH.
`The Honorable Kevin McNulty, Judge Presiding.
`
`Defendant.
`
`
`
`NON-CONFIDENTIAL BRIEF OF DEFENDANTS-APPELLANTS
`
`
`
`SHASHANK UPADHYE
`JOSEPH E. CWIK
`YIXIN H. TANG
`ERIN R. CONWAY
`ADAM D. SUSSMAN
`AMIN TALATI UPADHYE LLP
`100 S. Wacker Drive, Suite 2000
`Chicago, IL 60606
`(312) 466-1033
`
`Counsel for Defendants-Appellants
`Fera Pharmaceuticals, LLC and Oakwood
`Laboratories, LLC
`
`
`
`
`PRINTED ON RECYCLED PAPER
`
`
`
`Dated: December 23, 2016
`
`
`
`COUNSEL PRESS ∙ (866) 703-9373
`
`
`
`
`
`Mylan Ex 1047, Page 1
`
`

`

`Case: 17-1099 Document: 24 Page: 2 Filed: 12/27/2016
`
`CERTIFICATE OF INTEREST
`
`The full name of every party represented by me is:
`FERA PHARMACEUTICALS, LLC AND
`OAKWOOD LABORATORIES, LLC.
`
`The name of the real party in interest (if the party named in the caption is not
`the real party in interest) represented by me is:
`N/A.
`
`All parent corporations and any publicly held companies that own 10 percent
`or more of the stock of the party represented by me are:
`NONE.
`
`The names of all law firms and the partners or associates that appeared for
`the party now represented by me in the trial court or are expected to appear
`in this Court are:
`Shashank Upadhye
`Joseph E. Cwik
`Yixin H. Tang
`Erin R. Conway
`Adam D. Sussman
`AMIN TALATI UPADHYE LLP
`100 S. Wacker Drive,
`Suite 2000
`Chicago, IL 60606
`Telephone: 312-466-1033
`
`Eric I. Abraham
`Christina L. Saveriano
`HILL WALLACK LLP
`21 Roszel Road
`Princeton, NJ 08540
`Telephone: (609) 924-0808
`
`
`
`i
`
`
`
`1.
`
`2.
`
`3.
`
`4.
`
`
`
`Mylan Ex 1047, Page 2
`
`

`

`Case: 17-1099 Document: 24 Page: 3 Filed: 12/27/2016
`
`TABLE OF CONTENTS
`
`
`
`
`
`CERTIFICATE OF INTEREST ................................................................................ i
`TABLE OF CONTENTS .......................................................................................... ii
`TABLE OF AUTHORITIES ................................................................................... iv
`STATEMENT OF RELATED CASES .................................................................. vii
`STATEMENT OF JURISDICTION.......................................................................... 1
`STATEMENT OF THE ISSUES............................................................................... 2
`STATEMENT OF THE CASE .................................................................................. 5
`SUMMARY OF THE ARGUMENT ...................................................................... 13
`ARGUMENT ........................................................................................................... 17
`I.
`STANDARD OF REVIEW ........................................................................ 17
`II. LEGAL STANDARD – PRELIMINARY INJUNCTION ......................... 18
`III. THE DISTRICT COURT ABUSED ITS DISCRETION BY FINDING
`FRESENIUS KABI LIKELY TO SUCCEED ON THE MERITS OF
`INFRINGEMENT, WITHOUT PRESENTING ANY ANALYSIS OF
`INFRINGEMENT ..................................................................................... 19
`IV. THE DISTRICT COURT ABUSED ITS DISCRETION BY
`ERRONEOUSLY APPLYING THE LAW AND DISREGARDING
`EVIDENCE OF DECEPTION GIVING RISE TO A SUBSTANTIAL
`QUESTION OF PATENT UNENFORCEABILITY DUE TO
`INEQUITABLE CONDUCT .................................................................... 24
`V. THE DISTRICT COURT ERRONEOUSLY CONSIDERED THE
`DEFENSE OF UNCLEAN HANDS LEGALLY INDISTINCT
`FROM INEQUITABLE CONDUCT AND DISREGARDED
`INDEPENDENT EVIDENCE PRESENTED BY FERA, THEREBY
`ABUSING ITS DISCRETION IN FINDING FRESENIUS KABI
`LIKELY TO SUCCEED ON THE MERITS ............................................ 32
`VI. THE DISTRICT COURT ERRONEOUSLY APPLIED A
`HEIGHTENED LEGAL STANDARD TO THE LIKELIHOOD OF
`SUCCESS ON THE MERITS .................................................................. 37
`
`ii
`
`Mylan Ex 1047, Page 3
`
`

`

`Case: 17-1099 Document: 24 Page: 4 Filed: 12/27/2016
`
`VII. THE DISTRICT COURT CLEARLY ERRED IN FINDING A
`CAUSAL NEXUS BETWEEN THE ALLEGED INFRINGEMENT
`AND IRREPARABLE HARM, BASED ON A RECORD DEVOID
`OF ANY SUPPORTING EVIDENCE ...................................................... 41
`CONCLUSION .................................................................................................... 45
`
`
`
`
`
`CONFIDENTIAL MATERIAL OMITTED
`
`
`
`
`
`Pursuant to Federal Circuit Rule 28(d)(1)(B), Defendants-Appellants Fera
`Pharmaceuticals, LLC and Oakwood Laboratories, LLC (together, “Defendants-
`Appellants” or “Fera”) have prepared this public version of their brief in which
`they have redacted certain information designated confidential pursuant to the
`Protective Order, entered November 2, 2015. Specifically, the material omitted on
`page 23 references to Defendants-Appellants’ confidential information regarding
`formulation ingredients, and was designated confidential by Defendants-
`Appellants during discovery under the terms of a Protective Order entered by the
`district court. The material omitted on pages 27 and 31 references to information
`regarding stability data that was designated confidential by Plaintiff-Appellee.
`
`
`
`
`
`iii
`
`Mylan Ex 1047, Page 4
`
`

`

`Case: 17-1099 Document: 24 Page: 5 Filed: 12/27/2016
`
`TABLE OF AUTHORITIES
`
`
`
`Cases
`
`Abbott Labs v. Sandoz, Inc.,
` 544 F.3d 1341 (Fed. Cir. 2008)............................................................................ 37
`
`Abbott Labs. v. Andrx Pharms., Inc.,
` 452 F.3d 1331 (Fed. Cir. 2006)............................................................................ 37
`
`Altana Pharma AG v. Teva Pharms. USA, Inc.,
` 566 F.3d 999 (Fed. Cir. 2009)....................................................................... 17, 38
`
`Amazon.com, Inc. v. Barnesandnoble.com, Inc.,
` 239 F.3d 1343 (Fed. Cir. 2001).................................................................... passim
`
`Apple Inc. v. Samsung Electronics Co.,
` 695 F.3d 1370 (Fed. Cir. 2012)......................................................... 41, 42, 43, 44
`
`Apple Inc. v. Samsung Electronics Co.,
` 735 F.3d 1352 (Fed. Cir. 2013)......................................................... 41, 42, 43, 45
`
`Chinsammy v. United States,
` 95 Fed. Cl. 21 (Fed. Cl. 2010) ............................................................................. 29
`
`Digital Equip. Corp. v. Emulex Corp.,
` 805 F.2d 380 (Fed. Cir. 1986).............................................................................. 20
`
`Exergen Corp. v. Wal-Mart Stores, Inc.,
` 575 F.3d 1312 (Fed. Cir. 2009)..................................................................... 10, 40
`
`Gilead Sciences, Inc. v. Merck & Co.,
` Case No. 13-cv-04057, ECF No. 422 (N.D. Cal. Jun. 6, 2016) ................... 33, 36
`
`Hazel-Atlas Glass Co. v. Hartford-Empire Co.,
` 322 U.S. 238 (1944) ............................................................................................. 33
`
`Intelligent Bio-Systems, Inc. v. Illumina Cambridge, Ltd.,
` 821 F.3d 1359 (Fed. Cir. 2016)............................................................................ 17
`
`iv
`
`Mylan Ex 1047, Page 5
`
`

`

`Case: 17-1099 Document: 24 Page: 6 Filed: 12/27/2016
`
`
`
`Keystone Driller Co. v. Gen. Excavator Co.,
` 290 U.S. 240 (1933) ............................................................................................. 36
`
`Luminara Worldwide, LLC v. Liown Elecs. Co.,
` 814 F.3d 1343 (Fed. Cir. 2016)............................................................................ 41
`
`Mayo v. Lakeland Highlands Canning Co.,
` 309 U.S. 310, 316-17 (1940) ............................................................................... 17
`
`Microsoft Corp. v. GeoTag, Inc.,
` 817 F.3d 1305 (Fed. Cir. 2016)............................................................................ 19
`
`Murata Mach. USA v. Daifuku Am. Corp.,
` 830 F.3d 1357 (Fed. Cir. 2016)............................................................... 18, 20, 40
`
`Mylan Pharms., Inc. v. Thompson,
` 268 F.3d 1323 (Fed. Cir. 2001)............................................................................ 17
`
`Nat’l Steel Car, Ltd. v. Canadian Pac. Ry.,
` 357 F.3d 1319 (Fed. Cir. 2004)..................................................................... 18, 40
`
`Novo Nordisk of N. Am., Inc. v. Genentech, Inc.,
` 77 F.3d 1364 (Fed. Cir. 1996).............................................................................. 17
`
`Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co.,
` 324 U.S. 806 (1945) ............................................................................................. 33
`
`Reebok Int’l Ltd. v. J. Baker, Inc.,
` 32 F.3d 1552 (Fed. Cir. 1994).............................................................................. 18
`
`Star Scientific Inc. v. R.J. Reynolds Tobacco Co.,
` 537 F.3d 1357 (Fed. Cir. 2008)............................................................................ 28
`
`Therasense, Inc. v. Becton, Dickinson & Co.,
` 649 F.3d 1276 (Fed. Cir. 2011)..................................................................... 28, 33
`
`Titan Tire Corp. v. Case New Holland, Inc.,
` 566 F.3d 1372 (Fed. Cir. 2009)............................................................................ 15
`
`v
`
`Mylan Ex 1047, Page 6
`
`

`

`Case: 17-1099 Document: 24 Page: 7 Filed: 12/27/2016
`
`
`
`Statutes and Regulations
`
`21 U.S.C. §§ 355(b)(1)(A), (b)(2) (2012) .................................................................. 7
`35 U.S.C. 111(b)(8) .................................................................................................. 28
`37 C.F.R. § 1.56(a) ............................................................................................ 34, 35
`
`Rules
`
`Fed. R. Civ. P. 52(a) ........................................................................................ passim
`MPEP § 201.04(III) (9th ed. Rev. 11.2013, Mar. 2014) .......................................... 28
`MPEP § 2001.06 ...................................................................................................... 34
`
`vi
`
`Mylan Ex 1047, Page 7
`
`

`

`Case: 17-1099 Document: 24 Page: 8 Filed: 12/27/2016
`
`
`
`STATEMENT OF RELATED CASES
`
`Pursuant to Federal Circuit Rule 47.5, no other related cases are known to
`
`counsel for Defendants-Appellants to be pending in this or any other court that will
`
`directly affect or be affected by this Court’s decision on appeal.
`
`
`
`vii
`
`Mylan Ex 1047, Page 8
`
`

`

`Case: 17-1099 Document: 24 Page: 9 Filed: 12/27/2016
`
`
`STATEMENT OF JURISDICTION
`
`The district court had jurisdiction under 28 U.S.C. § 1331 and 1338(a). The
`
`district court’s September 20, 2016 Final Order granted Plaintiff-Appellee
`
`Fresenius Kabi USA LLC’s (“Fresenius Kabi”) motion for a preliminary
`
`injunction. (Appx0030-0031). On October 18, 2016, Fera timely appealed (Dkt. 1-
`
`2, Case No. 17-1099) from the district court’s Final Order. This Court has
`
`jurisdiction over Fera’s appeal pursuant to 28 U.S.C. § 1292(a)(1) and (c)(1).
`
`1
`
`Mylan Ex 1047, Page 9
`
`

`

`Case: 17-1099 Document: 24 Page: 10 Filed: 12/27/2016
`
`
`STATEMENT OF THE ISSUES
`
`
`
`Fera and Oakwood appeal:
`
`1.
`
`The district court construed the claim term “buffer” to mean “a system
`
`that resists changes in pH when acid or base is added.” Fera argued that, even
`
`under this construction, its lyophilized solid ANDA product cannot infringe.
`
`Without any analysis of whether the accused product contains a “buffer,” and
`
`without addressing any of the evidence Fera presented to the contrary, the district
`
`court summarily determined that Fera had not raised a substantial question of non-
`
`infringement. Was the district court’s conclusion that Fresenius Kabi was likely to
`
`succeed on the merits of infringement, completely devoid of factual findings as
`
`required by Fed. R. Civ. P. 52(a), an abuse of discretion?
`
`2.
`
`Contrary to law and the facts presented by Fera, the district court
`
`erroneously presumed that the provisional application from which the patents-in-
`
`suit claim the benefit, and which contains material information omitted by
`
`Fresenius Kabi from the specifications of the non-provisional applications, was
`
`considered by the patent examiner during prosecution of the patents-in-suit. The
`
`district court also disregarded evidence presented by Fera that Fresenius Kabi
`
`succeeded in deceiving the examiner by presenting ambiguous data and concealing
`
`data in its possession which refuted Fresenius Kabi’s arguments of non-
`
`obviousness of the claimed invention. In relying on these clearly erroneous factual
`
`2
`
`Mylan Ex 1047, Page 10
`
`

`

`Case: 17-1099 Document: 24 Page: 11 Filed: 12/27/2016
`
`
`findings, did the district court abuse its discretion in finding that Fresenius Kabi is
`
`likely to prevail at trial on Fera’s counterclaims of inequitable conduct?
`
`3.
`
`The law of this Court is clear that inequitable conduct and unclean
`
`hands are two distinct defenses to allegations of patent infringement. Yet, the
`
`district court summarily dismissed Fera’s claim that Fresenius Kabi improperly
`
`sought equitable relief from
`
`the court with unclean hands as a mere
`
`“bootstrapping” argument to its claim of inequitable conduct. The court did not
`
`address or evaluate any of the independent evidence Fera presented in support of
`
`its claim of unclean hands. In view of its erroneous application of the law and
`
`failure to make Fed. R. Civ. P. 52(a) factual findings, did the district court abuse its
`
`discretion by finding Fresenius Kabi likely to succeed on the merits of unclean
`
`hands?
`
`4.
`
`The prevailing standard for likelihood of success on the merits is set
`
`forth in Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343 (Fed. Cir.
`
`2001). The district court undertook, sua sponte, a lengthy evaluation of this Court’s
`
`precedent and ultimately determined that a different standard should be applied.
`
`The court admits, however, that on at least one of Fera’s defenses, application of
`
`the Amazon.com standard could have made a difference. Did the district court
`
`abuse its discretion in failing to properly apply the standard of Amazon.com in
`
`evaluating Fresenius Kabi’s likelihood of success on the merits?
`
`3
`
`Mylan Ex 1047, Page 11
`
`

`

`Case: 17-1099 Document: 24 Page: 12 Filed: 12/27/2016
`
`
`5.
`
`For a preliminary injunction to issue, the moving party must show
`
`both irreparable harm and a causal nexus between that harm and at least one
`
`patented feature of the invention. The record is devoid of any marketing materials,
`
`surveys, testimony or other documents supporting that any patented features drive
`
`sales of Fresenius Kabi’s FDA approved product, or would drive sales of Fera’s
`
`ANDA Product. Despite this, the court found it “inescapable” that customers
`
`purchased Fresenius Kabi’s product at “a premium” because of its allegedly
`
`increased stability and “patented status.” Did the district court abuse its discretion
`
`in finding that Fresenius Kabi will be irreparably harmed, based on these clearly
`
`erroneous factual findings with respect to causal nexus?
`
`
`
`
`
`4
`
`Mylan Ex 1047, Page 12
`
`

`

`Case: 17-1099 Document: 24 Page: 13 Filed: 12/27/2016
`
`
`STATEMENT OF THE CASE
`
`Defendants-Appellants Fera Pharmaceuticals, LLC
`
`and Oakwood
`
`Laboratories, LLC (“Defendants-Appellants” or “Fera”) respectfully appeal the
`
`district court’s Opinion (Appx0001-0029) and Order (Appx0030-0031) granting
`
`Plaintiff-Appellee Fresenius Kabi USA, LLC’s (“Plaintiff-Appellee” or “Fresenius
`
`Kabi”) motion for a preliminary injunction. Fresenius Kabi’s underlying lawsuit is
`
`one for patent infringement.
`
`The district court recognized that the decision to grant Fresenius Kabi’s
`
`motion for preliminary injunction was a close one, particularly with respect to
`
`Fresenius Kabi’s likelihood of success on the merits. (See, e.g., Appx0015
`
`(“Under the ‘substantial issue’ standard, this is a closer question.”); Appx0023
`
`(“My finding that Fera has not raised a substantial question is based primarily on
`
`the state of the paper record, but the question is a close one.”)). The court
`
`highlighted this closeness by its in-depth analysis of the proper standard that must
`
`be applied in determining a likelihood of success. (Appx0005-0011). Twenty-five
`
`percent of the court’s Opinion was devoted to this issue, which was not disputed or
`
`argued by any party during the injunction proceedings. To be sure, the court’s
`
`discussion of the standards was sua sponte. For this appeal, the standard is an
`
`important issue.
`
`5
`
`Mylan Ex 1047, Page 13
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`

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`Case: 17-1099 Document: 24 Page: 14 Filed: 12/27/2016
`
`
`Fera is the owner of an abbreviated new drug application (“ANDA”) seeking
`
`approval from the U.S. Food and Drug Administration (“FDA”) to market generic
`
`versions of Fresenius Kabi’s 100 mcg/vial and 500 mcg/vial levothyroxine sodium
`
`powder for injection products (“Fera’s ANDA Product”). (See, e.g., Appx1199).
`
`Fresenius Kabi sued Fera in mid-2015, asserting future infringement of U.S. Patent
`
`No. 9,006,289 (the “‘289 patent”). (Appx0124). During the course of the
`
`litigation, Fresenius Kabi sued Fera for infringing two newly issued patents—U.S.
`
`Patent Nos. 9,168,238 (“the ‘238 patent”) and 9,168,239 (“the ‘239 patent”).
`
`(Appx0574; Appx0577-0578). As levothyroxine-containing drugs have been
`
`marketed since the 1960’s, none of these patents claim the levothyroxine
`
`compound itself. Rather, these patents claim allegedly new formulations of
`
`levothyroxine.
`
`Levothyroxine is used to treat low thyroid hormone levels. Lyophilized “for
`
`injection” versions of the drug have been marketed in the U.S. since the 1960’s.
`
`(Appx1836 (“Initial U.S. Approval: 1969”)).1 For more than forty years, multiple
`
`companies marketed “unapproved” or grandfathered versions of the injectable
`
`product in the U.S. In 2008, Fresenius Kabi acquired one of these companies, APP
`
`Pharmaceuticals (“APP”), and became a self-described “globally leading supplier
`
`1 The APP label indicates the availability of a similar product in the 1960’s.
`However, the “first approval” language on the APP label is inaccurate. The product
`was FDA unapproved, or referred to as “grandfathered” by the parties in the case
`below.
`
`6
`
`Mylan Ex 1047, Page 14
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`

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`Case: 17-1099 Document: 24 Page: 15 Filed: 12/27/2016
`
`
`in the field of intravenously administered generic drugs.” (Appx1849). As such, at
`
`that time APP and, then Fresenius Kabi, were marketing “old” versions of a
`
`lyophilized levothyroxine product.
`
`In 2006, the FDA approached APP to discuss the unapproved status of its
`
`lyophilized levothyroxine product. (Appx1853). In 2010, APP, as a division of
`
`Fresenius Kabi, filed a § 505(b)(2) New Drug Application (“NDA”). (Id.). A
`
`§ 505(b)(2) NDA is permitted to rely on prior literature, rather than new clinical
`
`study
`
`results,
`
`to establish
`
`the
`
`safety and efficacy of
`
`the product.
`
`21 U.S.C. §§ 355(b)(1)(A), (b)(2) (2012). Accordingly, Fresenius Kabi relied on
`
`the safety and efficacy of the grandfathered product, did not conduct clinical
`
`studies, and obtained FDA approval in 2011 after spending a mere $3 million on
`
`R&D and regulatory approval. (Appx1878).
`
`All Fresenius did to support this new application was change the
`
`formulation, yet not significantly. (Appx1879). While the grandfathered product
`
`contained mannitol and a sodium phosphate salt, Fresenius Kabi’s FDA-approved
`
`version contained less mannitol and a different but “interchangeable” sodium
`
`phosphate salt. (Appx1802; Appx1882; Appx1884-1885). There is no evidence
`
`that the modification improved the safety or efficacy of the product, or drove
`
`market demand. Yet, over the years, Fresenius Kabi has repeatedly raised the
`
`prices of its FDA-approved product, without making any changes to the product
`
`7
`
`Mylan Ex 1047, Page 15
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`

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`Case: 17-1099 Document: 24 Page: 16 Filed: 12/27/2016
`
`
`itself. (Appx2097-2098; Appx2123). The product now brings in $80 million a year
`
`for Fresenius Kabi. (Appx1339 at ¶ 17).
`
`Upon FDA approval of its NDA, Fresenius Kabi had no patent protection on
`
`that underlying formulation. So, Fresenius Kabi embarked on its patent crusade,
`
`filing a series of patent applications with the U.S. Patent and Trademark Office
`
`(“USPTO”). The USPTO, however, repeatedly rejected the claims of the
`
`application which led to the ‘289 patent because the examiner did not find any
`
`patentable distinction of the “new” claimed formulation—less mannitol, different
`
`phosphate salt—over the prior art. Specifically, while Fresenius suggested in the
`
`patent specification that formulation stability was an issue, the examiner was not
`
`persuaded that the claimed invention was a non-obvious formulation with any
`
`distinctive or unexpectedly improved stability. (See, e.g., Appx0351-0358;
`
`Appx0786-0790). After these repeated rejections, a Fresenius Kabi employee and
`
`named inventor, Dr. Usayapant, submitted a declaration to the examiner in
`
`December 2014 which fraudulently persuaded the examiner that the modified
`
`formulation had improved stability over the prior art compositions. (Appx0377;
`
`Appx0426). Unbeknownst to the examiner, the declaration contains statements that
`
`are contradicted by information known to Fresenius Kabi. (Appx0231 at [0024];
`
`Appx0232; Appx0233 at [0028]; Appx0269-0270 at [0033]; Appx0270 at Table 1;
`
`8
`
`Mylan Ex 1047, Page 16
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`

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`Case: 17-1099 Document: 24 Page: 17 Filed: 12/27/2016
`
`
`Appx0271-0277; Appx0408-0410 at ¶¶ 9-10, 12, 14-17; Appx0423; Appx0426;
`
`Appx0635-0640).
`
`Fera filed its ANDA before any of the Fresenius Kabi patents on
`
`levothyroxine compositions had issued. After the ‘289 patent issued, Fera amended
`
`its ANDA
`
`to
`
`include
`
`a
`
`paragraph
`
`IV
`
`certification
`
`pursuant
`
`to
`
`21 U.S.C. § 355(j)(2)(A)(vii)(IV), stating
`
`that
`
`the
`
`‘289 patent
`
`is
`
`invalid,
`
`unenforceable, and/or not infringed by Fera’s ANDA Product. (Appx0146 at ¶¶ 15-
`
`16). Once the ‘289 patent became the basis of this lawsuit, Fera asserted highly
`
`detailed counterclaims of patent invalidity and unenforceability, which specifically
`
`described the untruthfulness of the Usayapant Declaration. Meanwhile, the
`
`continuation applications which ultimately matured into the ‘238 and ‘239 patents
`
`were still pending at the USPTO. Despite knowing Fera’s detailed invalidity and
`
`unenforceability challenges against the ‘289 patent, Fresenius Kabi took no action
`
`to inform the examiner in the pending continuation applications of these
`
`allegations.
`
`In September 2015, Fera asserted Inequitable Conduct counterclaims against
`
`Fresenius Kabi, before the ‘238 and ‘239 patents issued in late October 2015.
`
`(Appx0192-0219; Appx0457-0484). Despite their duty to do so, Fresenius Kabi’s
`
`employees and attorneys never disclosed to the USPTO Fera’s allegations of
`
`inequitable conduct, including the specific allegations that material information in
`
`9
`
`Mylan Ex 1047, Page 17
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`

`

`Case: 17-1099 Document: 24 Page: 18 Filed: 12/27/2016
`
`
`the provisional application regarding the prior art formulations’ superior stability
`
`was withheld from the USPTO. Currently, there is one other continuation
`
`application pending and Fresenius (even after it lost its motion to dismiss the
`
`inequitable conduct counterclaims) has taken no action to submit anything to the
`
`examiner in that case.
`
`Despite Fresenius Kabi’s knowing misrepresentations and omissions made
`
`during prosecution of the ‘289 patent, and violation of its duties of candor and
`
`disclosure during prosecution of the ‘238 and ‘239 patents and the presently
`
`pending application, the district court concluded that Fresenius Kabi was likely to
`
`prevail at trial on Fera’s counterclaims of inequitable conduct and unclean hands.
`
`(Appx0023-0024).
`
`Nevertheless, the district court recognized the merits of Fera’s inequitable
`
`conduct allegations in two distinct ways: (1) it denied Fresenius Kabi’s motion to
`
`dismiss and stated that Fera’s counterclaims were pled with the specificity required
`
`by Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009); and
`
`(2) in its injunction opinion it noted that the issue presented a “close case” in which
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`the standard of injunction may be dispositive. (Appx0020, Appx0023).
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`On June 29, 2016, the FDA granted final approval of Fera’s ANDA and
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`stated that Fera has earned the statutory 180-day marketing exclusivity.
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`(Appx2806). Anticipating the FDA’s final approval of Fera’s ANDA, Fresenius
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`Kabi filed its Motion for Preliminary Injunction on May 27, 2016. (Appx1192-
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`1193; Appx1307-1308).
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`In its Brief in support of its Motion for Preliminary Injunction, Fresenius
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`Kabi relied on six claims of the ‘289 patent—claims 1, 2, 4 and 14-16 (“the PI-
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`related claims”). (Appx1315). These claims each require a “lyophilized solid”
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`composition that includes a “buffer,” (Appx0085-0086) the meaning of which the
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`parties disputed during claim construction. The district court ultimately construed
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`“buffer” to mean “a system that resists changes in pH when acid or base is added.”
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`(Appx2709). The district court said, without analysis, that this construction was
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`“fatal” to Fera’s non-infringement argument and found that Fresenius Kabi was
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`therefore likely to succeed on the issue of infringement at trial. (Appx0012).
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`Fresenius Kabi presented no probative evidence—such as physician or
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`consumer surveys, market studies, or marketing materials—to support that any
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`product features claimed in the PI-related claims would drive sales of Fera’s
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`ANDA Product or would make Fera’s ANDA Product more desirable to
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`consumers. To be sure, nor did Fresenius Kabi present any evidence that patented
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`features drove sales of its own product. The evidence actually shows that there
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`was no increase in sales following Fresenius Kabi’s change of product formulation.
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`(Appx2098-2100 at ¶¶44-46; Appx2125). Even without any evidence to support a
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`causal nexus, the district court determined that Fresenius Kabi would be
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`irreparably harmed if Fera were not enjoined from entering the market with its
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`ANDA Product. (Appx0026).
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`SUMMARY OF THE ARGUMENT
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`
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`The district court abused its discretion on at least five points on which Fera
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`now appeals. First, the district court erroneously found that its construction of
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`“buffer” is fatal to Fera’s non-infringement arguments and, therefore, that
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`Fresenius Kabi is likely to succeed on the merits of infringement. This erroneous
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`finding is supported by absolutely no analysis of whether Fera’s ANDA Product
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`contains a “buffer” or whether any ingredient present in the accused product
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`performs the function set out in the court’s construction of this term. On this point,
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`the district court abused its discretion in finding in Fresenius Kabi’s favor.
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`Second, despite the evidence of Fresenius Kabi’s inequitable conduct and
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`the court’s opinion that the case was close, the district court erroneously concluded
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`that Fera still had not raised a substantial question of patent validity or
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`enforceability. The district court presumed that the provisional application from
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`which the ‘289, ‘238 and ‘239 patents claim the benefit, and which contains
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`material information omitted from the specifications of the non-provisional
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`applications, was considered by the patent examiner during prosecution of the non-
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`provisional applications. However, neither the law, nor the evidence of record
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`supports this presumption. The district court further erred in determining that the
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`examiner was not, in fact, deceived by Fresenius Kabi. The court ignored evidence
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`presented by Fera that, after several failed attempts, Fresenius Kabi finally
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`managed to persuade the examiner that the claimed invention was non-obvious, by
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`submitting unrepresentative data of purported improvement over the prior art,
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`while concealing data that indicated that prior art compositions were actually
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`stable. In relying on these clearly erroneous factual findings, the district court
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`abused its discretion in finding that Fresenius Kabi is likely to prevail at trial on
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`Fera’s counterclaims of inequitable conduct.
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`Third, the district court’s decision that Fresenius Kabi is likely to succeed on
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`the merits of unclean hands is based on an erroneous application of the law. The
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`district court erroneously rejected Fera’s unclean hands claim as mere
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`“bootstrapping,” and did not conduct any additional analysis regarding “unclean
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`hands” separate and apart from that of inequitable conduct. This conflation of the
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`law of unclean hands with that of inequitable conduct was, in itself, an abuse of
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`discretion. Further, the district court failed to make any factual findings regarding
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`Fresenius Kabi’s continuing violation of its duties of disclosure and candor to the
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`USPTO with respect to the ‘238 and ‘239 patents and the ‘521 application.
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`Fresenius Kabi was aware of Fera’s detailed allegations of inequitable conduct and
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`invalidity of the ‘289 patent during active prosecution of the applications which led
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`to the ‘238 and ‘239 patents, and continues to be aware of those allegations while
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`the ‘521 application remains pending. Yet, Fresenius Kabi representatives made
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`no mention of Fera’s allegations to the USPTO, in clear contravention of their
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`duties of candor and disclosure. These facts were erroneously disregarded by the
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`district court.
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`Fourth, the district court’s decision that Fresenius Kabi is likely to succeed
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`on the merits is based on an erroneous application of the law. Rather than applying
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`the “substantial question” standard of Amazon.com, Inc. v. Barnesandnoble.com,
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`Inc., 239 F.3d 1343 (Fed. Cir. 2001), which is the prevailing precedent of this
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`court, the district court relied on Titan Tire Corp. v. Case New Holland, Inc., 566
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`F.3d 1372 (Fed. Cir. 2009). The court devoted seven of twenty-seven pages of its
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`opinion discussing the various standards, even though neither party disputed or
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`argued this issue below. (See Appx0005-0011). After a lengthy review, the
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`district court erroneously determined that Titan Tire “reconcile[d] . . . the strands
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`of the caselaw.” (Appx0011). However, the failure to apply the controlling law of
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`Amazon.com was an error.
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`Last, the district court’s decision that Fresenius Kabi will suffer irreparable
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`harm without a preliminary injunction is based on clearly erroneous factual
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`findings with respect to the requisite causal nexus. In particular, in support of its
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`findings on irreparable harm, the district court considered it “inescapable that
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`customers are paying a premium for [the] stability” of Fresenius Kabi’s FDA
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`approved product. Not only is this finding not supported by the evidence of
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`record, but, under the law, it is not sufficient to demonstrate a causal nexus.
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`Fresenius Kabi did not present—and, therefore, the district court did not rely on—
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`any marketing materials, surveys or internal documents demonstrating that sales of
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`Fera’s ANDA Product (or Fresenius Kabi’s product for that matter) would be
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`driven by “stability.” There is no evidence linking “stability” or “a longer shelf
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`life” to any allegedly infringing featur