Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 1 of 34 PageID #: 18485
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`SEAGEN INC.,
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`v.
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`Plaintiff,
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`CASE NO. 2:20-cv-00337-JRG
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`IN THE UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`DAIICHI SANKYO CO., LTD.,
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`Defendant, and
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`ASTRAZENECA PHARMACEUTICALS
`LP and ASTRAZENECA UK LTD.,
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`Intervenor-Defendants.
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`DEFENDANTS’ MOTION FOR JUDGMENT OF INVALIDITY
`BASED ON SEAGEN’s POST-TRIAL DISCLAIMER AND
`FOR DISMISSAL OF INFRINGEMENT CLAIMS AS MOOT
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`Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 2 of 34 PageID #: 18486
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`I.
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`INTRODUCTION
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`Seagen’s at-all-costs attempt to avoid a patentability challenge before the Patent Trial and
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`Appeal Board (“PTAB”) has caused Seagen to voluntarily disclaim the purported inventions of
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`the asserted claims, thereby rendering those claims defunct and entitling Defendants to judgment
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`in their favor. On April 7, 2022, the PTAB instituted trial based, in part, on “the strong merits of
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`Petitioner’s argument that the claims lack enablement.” PGR2021-00030, Paper 17 at 3. In
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`response, Seagen hatched a plan to circumvent the PTAB’s decision. On April 20, 2022 (after the
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`jury verdict in this action), Seagen disclaimed all the claims of the ’039 patent that had not been
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`tried to the jury (Claims 6-8). Based on this disclaimer, Seagen then moved for Adverse Judgment
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`in the PGR (PGR2021-00042) that had been instituted to review only those claims. Because an
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`adverse judgment would dispose of that proceeding entirely, Seagen then argued to the PTAB that
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`it should grant rehearing and de-institute trial in the companion proceeding, PGR2021-00030,
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`where the claims tried to the jury (1-5, 9, and 10) were challenged. Seagen argued that institution
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`should be denied in PGR2021-00030 because of the advanced stage of litigation in this Court on
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`those particular claims and the fact that their disclaimer gambit had eliminated any overlap in
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`issues between the two PGR proceedings.
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`For the time being, Seagen’s stratagem prevailed in the PTAB. The PTAB Panel granted
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`Seagen rehearing in PGR2021-00030 and de-instituted trial, and then on July 25, 2022 entered
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`Adverse Judgment in PGR2021-00042. But Seagen’s stratagem was too clever by half. Seagen’s
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`disclaimer of Claims 6-8, and the resulting Adverse Judgment and cancellation of those claims,
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`requires judgment in Defendants’ favor on Claims 1-5, 9, and 10. Because those asserted claims
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`are not patentably distinct from the claims that Seagen disclaimed, and on which the PTAB entered
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`judgment, Seagen’s cause of action on the asserted claims is extinguished. Daiichi Sankyo Japan
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`and Intervenor-Defendants AstraZeneca Pharmaceuticals LP and AstraZeneca UK Ltd.
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`Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 3 of 34 PageID #: 18487
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`(collectively, “Defendants”) accordingly file this motion for judgment based on disclaimer and
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`cancellation.
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`II.
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`STATEMENT OF ISSUES TO BE DECIDED BY THE COURT
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`Defendants respectfully request that this Court decide the following issues:
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`• Whether Seagen’s disclaimer of Claims 6-8 has surrendered property rights in any other
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`claims that are not patentably distinct.
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`• Whether the PTAB’s Adverse Judgment against Seagen on Claims 6-8 extinguishes
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`Seagen’s cause of action for infringement of any other claims that are not patentably
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`distinct.
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`• Whether asserted Claims 1-5, 9, and 10 are not patentably distinct from Claim 8, thus
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`requiring this Court to enter judgment in favor of Defendants on these claims and declare
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`Seagen’s infringement claims moot.
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`• Whether, independent of patentable distinction, Seagen’s disclaimer of Claims 6-8 has
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`disavowed the full scope of asserted Claims 1-5 and 9-10 and invalidated those claims by
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`improper amendment, thus requiring this Court to enter judgment in favor of Defendants
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`on these claims and declare Seagen’s infringement claims moot.
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`III. THE RELEVANT CLAIMS OF THE ’039 PATENT
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`All claims of the ’039 patent are directed to types of ADCs. DX-0001 at Claims 1-10.
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`Claim 1 claims “[a]n antibody-drug conjugate having the formula:
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`2
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`Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 4 of 34 PageID #: 18488
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` . . . wherein . . . Ab is an antibody . . . Y is a Spacer unit, y is 0, 1, or 2, D is a drug moiety, p
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`ranges from 1 to about 20 . . . [and] wherein the drug moiety is intracellularly cleaved in a patient
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`from the antibody of the antibody drug conjugate or an intracellular metabolite of the
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`antibody-drug conjugate.”
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`All claims of the ’039 patent depend from Claim 1, meaning they include all the elements
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`of Claim 1 and add additional limitations. Claim 2 depends from Claim 1 and recites: “wherein
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`Y is a self-immolative spacer.” Claim 3 depends from Claim 2 and recites: “wherein y is 1.”
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`Claim 4 depends from Claim 3 and recites: “wherein p is about 3 to about 8.” Claim 5 depends
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`from Claim 4 and recites: “wherein p is about 8.”
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`Claims 6-9 are dependent claims, each directed to “[t]he antibody-drug conjugate of claim
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`1, 2, 3, 4, or 5.” Each of Claims 6-9 recites a limitation with a “wherein” clause, thus claiming a
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`limited class of Claim 1-5 ADCs. See Endo Pharm. Inc. v. Teva Pharm. USA, Inc., 919 F.3d 1347,
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`1355 (Fed. Cir. 2019) (discussing use of “wherein clause” to limit the claim).
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`Claims 6 and 7 recite the ADCs of Claims 1-5 wherein bioavailability of the ADC or an
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`intracellular metabolite thereof is improved.
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`Claim 8 recites “[t]he antibody-drug conjugate compound of claim 1, 2, 3, 4, or 5, wherein
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`the drug moiety is intracellularly cleaved in a patient from an intracellular metabolite of the
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`antibody-drug conjugate.” DX-0001 at Claim 8 (emphasis added). Claim 8 is thus a subclass of
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`the Claim 1-5 ADCs that has the characteristic of intracellular cleavage of the drug moiety from
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`an intracellular metabolite. This language, however, is wholly included as one of only two
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`intracellular cleavage options recited in Claims 1-5. As such, Claim 8 does not disclose or claim
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`anything new, but is simply only a part of what is already expressly recited in Claims 1-5. The
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`person of ordinary skill in the art (POSA) would therefore understand that the scope of narrower
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`3
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`Claim 8 is fully within the scope of broader Claims 1-5. Exh. A ¶¶ 18-20.
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`Claim 9 recites the ADCs of Claims 1-5 “wherein the antibody is a monoclonal antibody.”
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`Claim 10 depends from Claim 9, claiming “[t]he antibody-drug conjugate of claim 9, wherein the
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`antibody is a humanized monoclonal antibody.”
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`IV. RELEVANT PROCEDURAL HISTORY
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`Seagen filed this suit for patent infringement (the “Texas Litigation”) on October 20, 2020.
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`In December 2020, Daiichi Sankyo, Inc. and AstraZeneca Pharmaceuticals, LP (“Petitioners”)
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`filed a PGR for review of Claims 1-5, 9, and 10 (PGR2021-00030), challenging the patentability
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`of all claims that were then being asserted by Seagen in this present action. In January 2021, after
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`Seagen expanded the Texas Litigation to add counts of infringement for Claims 6-8 of the ’039
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`patent, the Petitioners filed a second petition for PGR (PGR2021-00042). On April 7, 2022, the
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`PTAB instituted both proceedings, thereby putting the patentability of all the claims of the ’039
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`patent into jeopardy in an adversarial setting. Of particular significance, the PTAB expressly
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`acknowledged that Petitioners had presented “strong merits . . . that the claims [challenged in
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`PGR2021-00030, i.e., Claims 1-5, 9, and 10,] lack enablement” and that the “related proceeding
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`PGR2021-00042 [challenging other claims of the ’039 patent, i.e., Claims 6-8], . . . has issues
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`almost identical to those in [PGR2021-00030].” PGR2021-00030, Paper 17 at 3 (emphasis added).
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`Meanwhile, in this Court, Seagen chose to proceed to trial only as to Claims 1-5, 9, and 10,
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`having earlier withdrawn its claims that Defendants infringed Claims 6-8 of the ’039 patent.
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`Dkt. 121 at 3 n.2. On April 8, 2022, the jury rendered a general verdict that Defendants infringed
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`at least one of the asserted claims, but did not specify which claims were infringed. Dkt. 369. This
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`Court entered judgment on July 19, 2022. Dkt. 432. Post-trial motions have not yet been filed.
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`Seagen no doubt feared that the PTAB would declare all claims unpatentable, including
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`the claims that the jury had found infringed, after the PTAB instituted post-grant review based on
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`Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 6 of 34 PageID #: 18490
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`its conclusion that Daiichi Sankyo had presented strong evidence of lack of enablement. In
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`response, Seagen concocted a strategy for escaping post-grant review. Seagen—on its own
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`initiative—filed a “Request for Rehearing,” asking the PTAB to “reconsider its Rehearing
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`Decision and deny institution” and specifically noted it disclaimed Claims 6-8. PGR2021-00030,
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`Paper 20 at 1, 3-4 (April 21, 2022). A few weeks later, Seagen requested that adverse judgment
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`be entered against it in PGR2021-00042. PGR2021-00042, Paper 24 (May 11, 2022). Five days
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`later after that, Seagen relied on the adverse judgment in an effort to convince the Board to de-
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`institute PGR on the remaining claims. PGR2021-00030, Paper 26 (May 16, 2022). In the
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`Request, Seagen attempted to insulate Claims 1-5 and 9-10 from the effects of the Adverse
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`Judgment it sought in PGR2021-00042, remarking that, as a matter of procedural rights, “Seagen’s
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`request for adverse judgment as to Claims 6-8 does not bear on the validity of Claims 1-5 and 9-
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`10, as a patent owner always has the option to disclaim claims at its discretion. 37 C.F.R. § 42.73.”
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`Id. (emphasis added). Other than this strictly procedural ground, no discussion nor support was
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`provided regarding how and why the requested “adverse judgment as to Claims 6-8 does not bear
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`on the validity of Claims 1-5 and 9-10.” Id.
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`Relying on Seagen’s specific request for the Adverse Judgment, the PTAB, on July 25,
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`2022, entered the Adverse Judgment against Claims 6-8, terminating PGR2021-00042. Exh. B.
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`Defendants now move for relief based on disclaimer and Adverse Judgment, which
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`occurred after the jury and bench trial in this case.
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`V.
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`ARGUMENTS
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`A.
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`Seagen’s Disclaimer of Claim 8 Invalidates All
`Asserted Claims Because They Are Not Patentably Distinct
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`Beginning in 1837, Congress granted patentees the power of disclaimer to avoid “the
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`early accepted general rule [that] a patent with an invalid claim was wholly void.” Ensten v.
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`Simon, Ascher & Co., 282 U.S. 445, 452 (1931). Congress provided, as amended, that the
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`patentee could “make disclaimer of such parts of the thing patented as he shall not choose to
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`claim or to hold,” 35 U.S.C. § 65 (1946) (Exh. C); the patentee who claimed a greater invention
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`than to which he was entitled could nonetheless sue “for the infringement of any part thereof,
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`which was bona fide his own, if it is a material and substantial part of the thing patented, and
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`definitely distinguishable from the parts claimed without right ….” Id. § 71. In the Patent Act of
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`1952, Congress modified the disclaimer statute in two respects: it required that only whole
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`claims be disclaimed, and eliminated the rule that unreasonable delay in filing a disclaimer
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`would invalidate the entire patent. See Allen Archery, Inc. v. Browning Mfg. Co., 819 F.2d 1087,
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`1096-97 (Fed. Cir. 1987); S. Rep. No. 1979, 82d Cong., 2d Sess., reprinted in 1952 U.S. Code
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`Cong. & Admin. News 2394, 2420–23.1 The America Invents Act further amended Section
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`253(a) in 2011 to eliminate the requirement of the 1952 Act that disclaimer be “without
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`deceptive intention.” Pub. L. 112–29, § 20(e), Sept. 16, 2011, 125 Stat. 334. Section 253(a)
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`currently provides:
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`Whenever a claim of a patent is invalid the remaining claims shall not thereby be
`rendered invalid. A patentee, whether of the whole or any sectional interest
`therein, may, on payment of the fee required by law, make disclaimer of any
`complete claim, stating therein the extent of his interest in such patent. Such
`disclaimer shall be in writing, and recorded in the Patent and Trademark Office;
`and it shall thereafter be considered as part of the original patent to the extent of
`the interest possessed by the disclaimant and by those claiming under him.
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`35 U.S.C. § 253(a). Even if “a claim of a patent is invalid, an action may be maintained for the
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`infringement of a claim of the patent which may be valid,” but the patentee cannot recover costs
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`absent disclaimer. Id. § 288.
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`1 See also Proposed revision and amendment of the patent laws, preliminary draft with notes,
`House Committee on The Judiciary, at 47-48 (January 10, 1950).
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`Although the case law on Section 253(a) is sparse, Supreme Court jurisprudence
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`illustrates the nature, purpose, and effect of a statutory disclaimer. A statutory disclaimer
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`relinquishes rights in the disclaimed invention. See Dunbar v. Myers, 94 U.S. 187, 193-94
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`(1876) (disclaimer will have the effect in a pending case “to limit the nature of the invention
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`secured by the patent, and to diminish the claims of the patent set forth in the specification”)
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`(emphasis added). The public is entitled to rely on the patentee’s disclaimer. As the Supreme
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`Court held, interpreting former section 65:
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`The disclaimer is a representation, as open as the patent itself, on which the public
`is entitled to rely, that the original claim is one which the patentee does not, in the
`language of the statute, ‘choose to claim or to hold by virtue of the patent.’ Upon
`the filing of the disclaimers, the original claims were withdrawn from the
`protection of the patent laws, and the public was entitled to manufacture and use
`the device originally claimed as freely as though it had been abandoned.
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`Altoona Publix Theatres v. Am. Tri-Ergon Corp., 294 U.S. 477, 492 (1935) (emphasis added).
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`“[T]he purpose of the disclaimer statute is to enable the patentee to relieve himself from the
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`consequences of making an invalid claim ….” Marconi Wireless T. Co. of Am. v. United States,
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`320 U.S. 1, 58 (1943). Indeed, a disclaimer “could not lawfully be anything but a disclaimer of
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`the fact either of original invention or of first invention.” Union Metallic Cartridge Co. v. U.S.
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`Cartridge Co., 112 U.S. 624, 644 (1884).
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`The Supreme Court held in Maytag Co. v. Hurley Mach. Co., 307 U.S. 243 (1939), that a
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`disclaimer of one claim invalidates other claims of the patent that recite the same invention. In
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`Maytag, the patentee had 36 apparatus claims for a washing machine and three method claims (1,
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`38, and 39) for washing fabrics. Three of those 39 total claims (apparatus Claims 23 and 26 and
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`method Claim 38) had been asserted and invalidated in a prior litigation. Id. at 244. But in those
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`days—when mutuality was required for collateral estoppel prior to Blonder-Tongue Labs., Inc. v.
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`Univ. of Ill. Found., 402 U.S. 313 (1971)—the patentee was free to assert the same patent claims
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`against a different defendant despite the earlier judgment of invalidity. Maytag, 307 U.S. at 245.
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`In doing so, however, the patentee would run the risk that a court could hold that an invalid claim
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`was not timely disclaimed, which would invalidate the entire patent; under a companion statute,
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`no infringement action could be brought on valid claims “if [the patentee] has unreasonably
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`neglected or delayed to enter a disclaimer,” 35 U.S.C. § 71 (1946). See Maytag, 307 U.S. at 245.
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`In an attempt to avoid that risk, the Maytag patentee disclaimed method Claims 1 and 38,
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`but not 39. It then asserted apparatus Claims 23, 26, and 29 (but not the remaining method
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`Claim 39) against a different defendant in a second action. Id.
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`The Supreme Court held that the patentee’s disclaimer of Claim 38 resulted in the
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`invalidation of undisclaimed method Claim 39 because it was not a distinct invention. A
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`patentee that confessed lack of original invention by disclaimer could only maintain rights in
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`other parts of the patent that were definitely distinguishable from the disclaimed claim. Id. at
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`245. The Court held that Claims 38 and 39 “describe but a single method,” and “the difference
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`in verbiage describes no difference in operation or result.” Id. at 246-47. The Supreme Court
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`held that “[if] Claim 39 describes the same method as Claim 38, it follows that failure either to
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`sue on 39 or to disclaim it along with 38 invalidates the patent.” Id. at 246. Accordingly, by
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`operation of former sections 65 and 71, the Court held that the entire patent (including the
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`otherwise valid apparatus claims) was invalid. Id.
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`The latter part of the Supreme Court’s holding (invalidating the entire patent, including
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`distinct apparatus claims, for failing to timely disclaim an invalid claim) is no longer the law. As
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`the Federal Circuit explained, the Patent Act of 1952 modified the provisions of former sections
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`65 and 71 that required invalidation of the entire patent because of untimely disclaimer of an
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`invalid claim. See Allen Archery, 819 F.2d at 1095-97. Under the revised statutes, “[t]he failure
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`of a patentee to disclaim an invalid patent claim does not prevent the patentee from enforcing
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`any remaining claims in the same patent which are otherwise valid.” Id. at 1097 (emphasis
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`added). But nothing changed the core principle, recognized in Maytag, that disclaimer
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`invalidates other claims that are not patentably distinct inventions. See Ingersoll Mill. Mach. Co.
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`v. Gen. Motors Corp., 110 F.Supp. 12, 37, 40 (N.D. Ill. 1952) (ruling that “[a] patentee who
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`voluntarily makes disclaimer of a claim prior to any adjudication of his patent is free to retain
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`any other claims in his patent which are definitely distinguishable from the claim or claims
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`disclaimed,” and upholding the asserted claim because it was “patentably distinguished” from
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`the disclaimed one) (emphasis added).
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`The 1952 Act, as amended, eliminated the power of patentees to disclaim parts of claims,
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`and required instead disclaimer of a “complete claim.” 35 U.S.C. § 253(a). It thus discarded the
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`language that “his patent shall be valid for all that part which is truly and justly his own,” and
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`that “may make disclaimer of such parts of the thing patented as he shall not choose to claim or
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`to hold by virtue of the patent or assignment.” 35 U.S.C. § 65 (1946). And Congress repealed
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`former section 71, recited in Maytag, that authorized a patent infringement suit “for the
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`infringement of any part thereof, which was bona fide his own, if it is a material and substantial
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`part of the thing patented, and definitely distinguishable from the parts claimed without right,”
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`35 U.S.C. § 71 (1946); see Allen Archery, 819 F.2d at 1095-97. But the core principle remains
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`that a disclaimer surrenders a claim without right of an invention that the inventor did not possess
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`or that is otherwise invalid: a disclaimer is a “disavowal of the apparent right to exclude others
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`from something improperly included in the words of his grant.” Ensten, 282 U.S. at 452. Thus,
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`the rule applied in Maytag is still the law under section 253: disclaimer invalidates claims that
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`are not patentably distinct because they cover the same invention to which the inventor is not
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`entitled. Indeed, the Senate Report to the 1952 Act, in discussing the elimination of the
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`requirement that “an invalid claim must be disclaimed without unreasonable delay in order to
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`save the rest of the patent,” commented that under the 1952 Act:
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`if one claim of a patent is invalid, the patentee may take it out. He may sue on the
`remaining claims which have whatever validity they may have on their own merits. That
`is, one bad claim does not affect the other claims, unless they are also bad for similar
`reasons.
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`S.Rep. No. 1979, 82d Cong., 2d Sess. (emphasis added), reprinted in 1952 U.S. Code Cong. &
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`Admin.News 2394, 2401–03 (quoted in Allen Archery, 819 F.2d at 1097). Seagen was free to
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`disclaim Claim 8, but it thereby surrenders rights to the invention recited therein. That surrender
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`includes any claims that seek to cover patently indistinct subject matter.
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`This Court has recognized the operation of disclaimer: “A patentee's statutory disclaimer
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`‘relinquishes the rights of the patent owner’ and cancels the claims subject to the disclaimer.”
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`Lemaire Illumination Techs., LLC v. HTC Corp., No. 2:18-CV-00021-JRG, 2019 WL 1489065,
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`at *2 (E.D. Tex. Apr. 4, 2019) (quoting Rembrandt Wireless Techs., LP v. Samsung Elecs. Co.,
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`853 F.3d 1370, 1383 (Fed. Cir. 2017)) (emphasis added). “Therefore, by filing a statutory
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`disclaimer, [the patentee] relinquished any right to exclude others from the subject matter of [the
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`claim].” Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996) (emphasis added).
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`Because disclaimer forfeits the right to exclude others from the recited invention, not just
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`the verbal formulation of the claim, disclaimer invalidates claims that are not patentably distinct.
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`This fundamental principle of disclaimer accords with the rule, under the law of collateral
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`estoppel, that “an administrative decision of unpatentability generally requires the invalidation of
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`related claims that present identical issues of patentability.” MaxLinear, Inc. v. CF CRESPE
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`LLC, 880 F.3d 1373, 1377 (Fed. Cir. 2018). “[P]recedent does not limit collateral estoppel to
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`patent claims that are identical. . . . If the differences between the unadjudicated patent claims
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`and adjudicated patent claims do not materially alter the question of invalidity, collateral
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`estoppel applies.” Id. (quoting Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333, 1342
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`(Fed. Cir. 2013)). The same principle applies to claim preclusion: “claims which are patentably
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`indistinct are essentially the same,” and thus a prior judgment of invalidity of a claim is
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`preclusive of a patentably indistinct claim. Simple Air, Inc. v. Google LLC, 884 F.3d 1160, 1167
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`(Fed. Cir. 2018); cf. Application of Yale, 347 F.2d 995, 1000 (CCPA 1965) (disclaimer of
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`interference counts is treated as prior art and can be used to invalidate patentably indistinct
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`inventions). Further, “when a patent expires, the public is free to use not only the same invention
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`claimed in the expired patent but also obvious or patentably indistinct modifications of that
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`invention.” Gilead Scis., Inc. v. Natco Pharma Ltd., 753 F.3d 1208, 1214 (Fed. Cir. 2014). The
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`rule is no different when an invention enters the public domain by disclaimer.
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`Seagen’s disclaimer of Claim 8 invalidates all claims of the ’039 patent that are
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`patentably indistinct, and extinguishes its cause of action for infringement on those claims.
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`Indeed, it would be absurd if the law was otherwise. As described below, the Adverse Judgment
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`entered against Seagen precludes Seagen from obtaining claims that are not patentably distinct
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`from Claim 8. Permitting Seagen to continue to assert claims having a scope that would be
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`unpatentable if Seagen sought to now obtain such claims in a continuation application, would be
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`completely contrary to the polices underlying disclaimer and collateral estoppel.
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`As demonstrated below, infra at Section V.C, asserted Claims 1-5, 9, and 10 are
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`patentably indistinct from Claim 8. This Court should vacate the final judgment entered on
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`behalf of Seagen, enter judgment for Defendants of invalidity based on disclaimer, and declare
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`Seagen’s infringement claims moot.
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`B.
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`The Adverse Judgment Entered Against Seagen Claims 6-8 Requires
`Judgment for Defendants on All Claims That Are Not Patentably Distinct
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`Seagen did not merely disclaim Claim 8; it relied on its disclaimer to move the PTAB to
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`resolve the PGR on unpatentability of those claims by entering Adverse Judgment. That
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`Adverse Judgment extinguishes Seagen’s cause of action for patent infringement, and is an
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`independent basis for entering judgment in favor of Defendants.
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`At any time during a PTAB proceeding, “a party may request a[n adverse] judgment
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`against itself[.]” 37 C.F.R. § 42.73(b). “A judgment, except in the case of a termination,
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`disposes of all issues that were, or by motion reasonably could have been, raised and decided.”
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`Id. § 42.73(a). Although here Seagen specifically moved for an Adverse Judgment, even without
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`a specific request “cancellation or disclaimer of a claim such that the party has no remaining
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`claim in the trial” is “construed to be a request for adverse judgment.” Id. § 42.73(b)(2). An
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`Adverse Judgment entered by the Board in response to such a request is deemed “final, as the
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`judgment terminate[s] the [PTAB] proceeding.” Arthrex, Inc. v. Smith & Nephew, Inc., 880 F.3d
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`1345, 1348 (Fed. Cir. 2018).
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`A PGR, like an inter partes review, is “an in rem proceeding—a proceeding to reevaluate
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`the validity of an issued patent.” Regents of the Univ. of Minn. v. LSI Corp., 926 F.3d 1327,
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`1345 (Fed. Cir. 2019). And like an IPR proceeding, if claims are revoked in a PGR, the
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`proceeding ultimately terminates in cancellation of claims. 35 U.S.C. § 325(b). And PTO
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`regulations extend the effect of that judgment to other claims that are not patentably distinct.
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`Specifically, 37 C.F.R. § 42.73(d)(3)(i) provides that “[a] patent … owner is precluded from
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`taking action inconsistent with the adverse judgment, including obtaining in any patent … [a]
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`claim that is not patentably distinct from a finally refused or canceled claim.” Under Rule 42.73,
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`Seagen cannot maintain a cause of action for patent infringement on claims that are not
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`Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 14 of 34 PageID #: 18498
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`patentably distinct from Claim 8, because that is “action inconsistent with the adverse judgment”
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`on those claims.
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`Even apart from Rule 42.73, the PTAB’s adverse judgment would have the same effect.
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`As the three panel judges in Regents of the University of Minnesota declared, citing MaxLinear,
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`Inc. and Ohio Willow Wood,
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`To the extent the estoppel provisions in 37 C.F.R. § 42.73(d)(3), prevent a patent
`owner from obtaining a patent on claims that are patentably indistinct from
`cancelled claims in an IPR proceeding, that result is no different than what is
`mandated under traditional principles of res judicata and collateral estoppel. See
`B & B Hardware, Inc. v. Hargis Indus., Inc., U.S., 135 S. Ct. 1293, 191 L.Ed.2d
`222 (2015); MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373 (Fed. Cir. 2018);
`Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d 1333 (Fed. Cir. 2013). In the
`absence of such a provision, the result would still be the same (i.e., the later claim
`is unpatentable for the same reasons as the earlier patentably indistinct claim).
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`926 F.3d at 1345 n.5 (Additional views of Dyk, Wallach, and Hughes). Administrative
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`judgments, including consent judgments, have preclusive effects on judicial proceedings.
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`Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 107 (1991); Arizona v.
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`California, 530 U.S. 392, 414 (2000) (“consent judgments ordinarily support claim
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`preclusion but not issue preclusion”). The Adverse Judgment on unpatentability bars
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`Seagen from proceeding in this action on patentably indistinct claims. SimpleAir, Inc., 884
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`F.3d at 1167.
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`The Federal Circuit has recognized a particularly strong form of preclusion from
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`administrative judgments that arises from the cancellation authority of the PTO, and
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`extinguishes a patentee’s cause of action even if after a district court enters an appealable
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`final judgment (so long as the final judgment is still reviewable by the judicial department).
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`Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2013). “[W]hen a claim
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`is cancelled, the patentee loses any cause of action based on that claim, and any pending
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`Case 2:20-cv-00337-JRG Document 448 Filed 08/22/22 Page 15 of 34 PageID #: 18499
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`litigation in which the claims are asserted becomes moot.” Id. at 1340. Thus, even if the
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`district court enters a final judgment for purposes of appeal,2 that would not “preclude
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`application of the intervening final judgment” entered by the PTAB in PGR2021-00042.
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`See id. at 1341. Indeed, a final PTAB judgment cancelling a claim would be applied even
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`on appeal, so as long as the entire case was not yet concluded. Id. at 1342. “The intervening
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`decision invalidating the patents unquestionably applies in the present litigation, because
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`the judgment in this litigation was not final.” Id. at 1344. A final PTAB judgment binds
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`this Court “because Congress has expressly delegated [PGR] authority to the PTO under a
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`statute requiring the PTO to cancel rejected claims, and cancellation extinguishes the
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`underlying basis for suits based on the patent.” Id. Cancellation by disclaimer has the
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`same effect of extinguishing the cause of action, as if the disclaimed claims had never
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`existed, and rendering infringement claims moot. Sanofi-Aventis U.S., LLC v. Dr. Reddy's
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`Labs., Inc., 933 F.3d 1367, 1373 (Fed. Cir. 2019) (citing Fresenius); Lemaire, 2019 WL
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`1489065 at *2. Because all the asserted claims that are not patentably distinct from Claim
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`8 are thus extinguished, judgment of invalidity on all claims should be granted to
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`Defendants on the independent ground of cancellation, and Seagen’s infringement claims
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`2 This Court denominated the judgment a “final judgment,” Dkt. 432, and Defendants plan to file
`post-trial motions within 28 days of that judgment. However, Defendants note that the judgment
`is not truly final because, separate from its claim for damages through verdict, Seagen has an
`outstanding claim for a “running royalty” (i.e., equitable relief to order Defendants to pay a
`running royalty for post-verdict infringement). Doc. 1 at 12, Prayer for Relief ¶ e; Doc. 390 at 2
`(Seagen’s declaration of intent to file a motion for “an ongoing and enhanced royalty rate and
`supplemental damages”). “A ‘final decision’ generally is one which ends the litigation on the
`merits and leaves nothing for the court to do but execute the judgment.” Catlin v. United States,
`324 U.S. 229, 233 (1945). There is no final and appealable judgment when the court has not
`decided the question of future damages. See United States v. Burnett, 262 F.2d 55, 59 (9th Cir.
`1958); International Controls Corp. v. Vesco, 535 F.2d 742, 748 (2d Cir. 1976) (“a judgment
`cannot be considered final as long as it leaves open the question of additional damages”).
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`should be dismissed as moot.
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`Additionally, Seagen’s disclaimer of Claim 8 prohibits assertion of Claims 1-5 and
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`9-10 by virtue of collateral estoppel. The Board’s decision in a PGR is entitled to
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`preclusive effect. See, e.g. Papst Licensing GmbH & Co. KG v. Samsung Elecs. Am., Inc.,
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`924 F.3d 1243, 1250-51 (Fed. Cir. 2019) (collecting cases regarding IPR proceedings). As
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`the Federal Circuit has explained, “the general rule is that ‘[w]hen an issue of fact or law
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`is actually litigated and determined by a valid and final judgment, and the determination is
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`essential to the judgment, the determination is conclusive in a subsequent action between
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`the parties, whether on the