Adrienne Naumann recently spoke for our United States Federal Intellectual Property Developments 2018-2019 Webinar, offering her expertise for both the webinar and the corresponding E-Book. She established her own practice in 1996, exclusively focusing on intellectual property law. We’re so glad to be able to share her article here!

In Amgen, Inc. v. Sandoz, Inc., 137 S. Ct. 1664 (2017) the U.S. Supreme Court [hereinafter the Court] held that an applicant need not disclose certain technical information to another company under the federal abbreviated drug approval process. See 42 U.SC. sections 262(k) and 262(l). The Court also held that an injunction is not available to enforce compliance with this specific federal disclosure requirement. Under this abbreviated process an applicant may obtain a license for commercial marketing of its pharmaceutical product, if its pharmaceutical is (i) derived from living organisms and (ii) sufficiently similar to a licensed pharmaceutical that had undergone the traditional approval process. The traditional process requires numerous clinical tests and other technical data by a ‘sponsor,’ so there is a strong incentive for an applicant to ‘piggyback’ on the sponsor’s submissions under the abbreviated process. Also during the abbreviated process, the two companies may determine whether the sponsor’s patents would be infringed prior to the applicant’s pharmaceutical’s manufactured and sales. The statute expressly provides a remedy of an immediate declaratory judgment to the sponsor if the applicant does not disclose its FDA licensing application and manufacturing information to the sponsor.

In the instant case, Amgen was the sponsor with a traditionally licensed protein to stimulate white blood cell production. Sandoz submitted an abbreviated approval application for a biosimilar product, but it refused to disclose its application or manufacturing information to Amgen. Thereafter Amgen filed a lawsuit against Sandoz for patent infringement, conversion and unfair competition, but the trial court dismissed these counts. The U.S. Court of Appeals for the Federal Circuit [hereinafter the Federal Circuit] affirmed and held that Sandoz need not disclose the licensing application or manufacturing information to Amgen. It also held that there was no injunction available for compliance with this particular disclosure.

Before the Court, Amgen contended in part that the term “shall” of the statute conclusively demonstrates that disclosure of a licensing application and manufacturing information is mandatory. Amgen also contended that merely because the statute did not expressly include an injunction as a remedy did not preclude its use. However, Sandoz contended that non-disclosure was simply a conditional precedent that results in forfeiture of litigation rights to the sponsor. Sandoz further stated that injunctions were not explicitly included as a remedy for this non-disclosure, whereas in other statutory provisions an injunction was included as a remedy. The Court agreed with Sandoz on both these points. However, it also concluded that although an injunction was not an option under the federal statute, it may be a remedy under the state law count of unfair competition. The Court then remanded the case to the Federal Circuit to determine whether Sandoz’s non-disclosure constitutes unfair competition under state law, and it so whether an injunction was possible.

[1] Another issue before the Court was whether the applicant may provide the notice of initial commercial marketing to the sponsor prior to FDA licensing. The Court reversed the Federal Circuit which had previously held that notice must be provided only after the applicant actually receives its license. Instead the Court squarely held that notice may be provided either before or after actual receipt of the license.

Honey Kessler Amado recently shared her expertise with us in our How to Write a Better Appellate Brief webinar. She also teamed up with her fellow Advanced Appellate Conference speakers Benjamin Shatz and Robin Meadow to write this article, and we’re happy to present it here!

Justice Stephen Breyer of the United States Supreme Court has described oral argument as a conversation. Its purpose is to help the court decide the case. You help the court by having a well-developed argument and by answering the court’s questions.

Although oral argument is usually optional, given its purpose it should not be waived. This is counsel’s only chance to discuss the case with the justices who will decide it. (Appellate judicial officers are called justices in the state court of appeal and judges in the federal court of appeals. This article will refer to all judges on the appellate level – state and federal – as justices.) Further, because appellate courts rarely provide tentative opinions before oral argument, counsel rarely knows whether the court has questions about the case or has made a factual or legal error in its analysis. Waiving oral argument means losing a critical opportunity to affect the decision. Indeed, several appellate justices have commented that they are surprised when counsel waives argument; it suggests that counsel is not interested in engaging with the court.

Preparing for Oral Argument

The key to effective oral argument and confident delivery is preparation. As one colleague says, “Become master of the record and the law.” Begin with reviewing your record summaries, and go back into the record itself to confirm critical factual points. Then read all the briefs. If a brief contains a factual statement that you do not recall from your review of the record, go back to the record to be certain the statements are correct or appropriately complete or contextualized.

As you review the record and briefs, begin reviewing the law. Re-read the statutes and leading cases on which you and your opposition rely. As time has passed between briefing and preparing for oral argument, a re-reading of the key cases is warranted; and the fresh reading may bring different insights about them. Research whether there have been any changes to the controlling statutes or any new decisions that may affect the case. If there are a number of relevant or key cases, you may find it helpful to create a chart or other summary of the cases – including citation, key facts, and holding – for easy reference during argument.

If there is a new, significant case on point to your factual or legal issues, bring that case to the court’s attention. (See California Rules of Court (“C.R.C.”), Rule 8.254, for the procedures 2 for doing so.) If your preparation reveals a critical case that you did not discuss in your brief or that is necessary to respond to appellant’s reply brief, send a letter to the court, copied to opposing counsel, stating that you will refer to the case at oral argument.

When preparing, think anew about the case. Consider the strengths of your opposition: what is his or her best argument? Consider the weaknesses of your case: where is it vulnerable? Consider whether there are policy issues that you should address or that the court may raise. Anticipate the questions of the court. And ask yourself whether you can succinctly say where the trial court erred and why — or why its decision was correct – under the governing standard of review and controlling law.

Corral your thoughts into organized notes. The notes should address all of the points that you want to make. (Your argument should be focused on a few main points, not necessarily on every issue raised in your brief. But be prepared to answer questions on any points raised in your brief.) The notes should include a carefully prepared opening that summarizes your position, capturing the justice and reason of your side of the case.

Organize all your materials for oral argument into a notebook. The notebook – which for preparation purposes can be physical or digital (for example, using Microsoft’s OneNote) – should include your argument notes, copies of relevant statutes, summaries or copies of relevant cases, your chart of cases, a time-line of critical events, a list of essential facts, and key documents from the record which you may need to reference during argument. Whether you take the notebook to the lectern is a matter of personal style. Some lawyers prefer having just a page of notes, and some take no notes at all to the lectern.

The final step of preparation is practice. Say your argument aloud. Stand in your office or in front of a mirror, with your notebook, and give your argument to nobody in particular! How does it sound to your ear? Does hearing it expose weaknesses, inconsistencies, flawed logic, or awkward transitions? Does it evoke questions? Work on these questions or weaknesses. After this polishing, practice it again. And again. become so familiar with the arguments – familiar, not memorized – that you can easily access parts of the argument when answering the court’s questions.

When you can assemble a moot court, do so. But do not be discouraged if moot court is not available. You can still practice, polish, practice, and practice again (“the Four P’s”)!

Presenting the Argument

In the California state-appellate courts, each party is generally allowed to designate how much time it wants for argument, up to a maximum of 30 minutes. (The calendar notice will probably disclose any different practice.) In the federal appellate courts, oral argument is mandated except in the most limited of circumstances, but the court will decide how much time is allocated to each side, also up to 30 minutes each side. (For state-court appeals, see C.R.C., Rule 8.256 and local District rules; for federal-court appeals, see Federal Rules of Appellate Procedure, Rule 34 and Circuit Rule 34.)

Do not give a prepared speech. Oral argument is not a closing argument, and an impassioned speech will not persuade – or even impress – the court. The conversation is the persuasion.

Your notes and outline are your guide for the conversation, not your script. If you have a “cold bench” that does not ask any questions, your notes will be the logical sequence of your argument. If you have a “hot bench” that interrupts with questions, depart from your sequence but use the information in your notes to answer the questions. Questions are your friends. Questions allow you to focus on what interests the court. They provide insights into what concerns the court and can reveal a critical misunderstanding of the facts.

Listen to the questions. Ask the court to repeat a question if you are not sure of it (or, as happens, cannot hear it). If necessary, take a moment to think about the question. A justice may not be arguing or rejecting your point; he or she may simply be seeking help on how to write up a point. Sometimes a justice poses a question in an effort to resolve a debate among the justices or lobs a “softball” designed to underscore a point to another member of the panel.

Answer the questions, and answer them immediately. This is imperative – never just say that you will return to the point. If the court has a question, that is all that interests the court at that moment. If you are asked a “yes” or “no” question, answer with a direct “yes” or “no” and then explain your answer. If the court asks a hypothetical, answer it. Sometimes the court is exploring concepts through hypotheticals. After answering, if necessary, distinguish the hypothetical from your case or bring the court back to your facts. Concede weak points; it preserves your credibility. But explain why that weak point is not controlling or fatal. If you are uncertain of an answer, state that. Where appropriate, explain why you are uncertain. If the point is critical, ask for an opportunity to submit a short letter brief on the question. If the court thinks the answer is critical, it will probably give you that opportunity.

Listen to your opponent’s argument. What has the court asked counsel? Do the questions reveal that the justices – or some of the justices – agree with you? Where is the court struggling? As respondent, start with these points. Clarify a point that your opposition could not; clarify any misunderstanding or misstatements about the record. Help resolve the court’s struggle. If the questions indicate that the court is sympathetic to your argument, reinforce the point by citing to the record or relevant authorities to assure the court that its sympathies are well-founded.

Know when to sit down. If it is clear that the court has fully accepted your argument, as reflected in the questions to your opponent, you should offer to submit on that issue “unless the court has any questions.”

When the court has completed asking its questions and you have covered all your points, argument is finished. Try to end on a strong note, ideally with a prepared closing that summarizes why you should win or what relief you want (e.g., a full reversal, or reversal and remand on particular issues). Some counsel end with the prepared closing alone; others will then ask if there are any further questions as a final deference to the court. The final courtesy is to thank the court for its attention.

It is often said that we give three arguments – one we prepare to give, one we actually give, and one we give on the way home. The one on the way home is always the best. But when well prepared, the one we actually give can be very satisfying, whatever the outcome.

Adrienne Naumann recently spoke for our United States Federal Intellectual Property Developments 2018-2019 Webinar, offering her expertise for both the webinar and the corresponding E-Book. She established her own practice in 1996, exclusively focusing on intellectual property law. We’re so glad to be able to share her article here!

In Impression Products, Inc. v. Lexmark International, Inc., 137 S. Ct. 1523 (2017) [hereinafter ‘Impression Products’ and ‘Lexmark’] the United States Supreme Court [hereinafter ‘the Court’] held that a patent owner’s voluntary transfer of a U.S. patented item for value is the only requirement for an authorized sale of that item. The Court also held that a purchaser’s non-compliance with post sale restrictions does not result in this sale becoming unauthorized. Authorization is critical, because without it the patent owner retains patent rights in the item and a purchaser’s activity may result in patent infringement. In contrast, with an authorized sale a consumer receives a product of a patented technology free and clear of these patent rights.

Lexmark sold its U.S. patented toner cartridges to Impression Products under a sales agreement which prohibited the purchaser’s reuse and resale. Subsequently, Lexmark filed a U.S. patent infringement suit based upon Impression Products’ sales of toner cartridges initially sold in (i) the United States and (ii) other countries and then imported into the United States. The trial court dismissed the infringement suit for U.S. sales based upon patent exhaustion, but it did not dismiss the lawsuit based upon foreign sales and patent exhaustion.[1]

The en banc U.S. Court of Appeals for the Federal Circuit [hereinafter ‘the Federal Circuit’] held that for the patent owner’s sales occurring in the United States, Lexmark’s lawful post-sale restrictions, with adequate notice, prevents patent exhaustion. For Lexmark’s initial international sales, the Federal Circuit held that a U.S. patent owner does not forfeit the right to prevent infringing products from entering the U.S. The Federal Circuit did not follow Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013) [hereinafter ‘Kirtsaeng’] which held that that a U.S. copyright owner does not retain rights to tangible items containing copyright if the owner voluntarily sells these items outside the United States.

The Court reversed the Federal Circuit and held that a U.S. patentee’s voluntary sale of patented items in the United States is authorized and exhausts all U.S. patent rights in those products. It further held that a sale is authorized even if there is non-compliance with contractual post-sale restrictions. The Court relied in part upon Quanta Computers, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008) which held that a patentee’s authorized sale through its licensee removed products from patent protection. The Court stated that extending U.S. patent rights beyond the first sale adversely affects business, especially in transactions with used products. However, the Court further stated that a breach of contract lawsuit for non-compliance with post-sale restrictions was a possible remedy.

For international sales, the Court found Kirtsaeng controlling, and so a patentee’s authorized sale of a product item anywhere in the world also exhausts patent rights. In sum, post-sale restrictions and sale location do not result in patent infringement by the purchaser, because the only relevant inquiry is whether the patentee voluntarily transferred an item of patented technology for a one-time financial reward.

[1] Patent exhaustion is defined as the absence of patent rights in a product after a patentee’s voluntary sale of a product, and where that product is a tangible representation of a U.S. patented technology. A licensee in the present context is defined as those rights transferred to another by a patent owner to use, sell or create the patented technology, but without transferring ownership of the patented technology.