patterning are are admitted by the other side are clear it's just a matter of applying the law to those facts and our position is that the that the application of the law to those facts is clear under the facts of this case where the ready for pathname finding demanded by the district judge was well beyond anything that this court has ever required for an able the chilling so in this case in this case where ponens own client admitted on the witness stand that there was efficacy shown at the time of the phase two testing and at the time of the face three testing and they actually had results in a phase three testing that showed that this drug works for its intended purpose that is sufficient by a long shot to get over any any standard of enablement this been established in this court so because those facts are a minute your honor yes this in this case there are events that we say satisfy the ready for patterning showing that were before the actual sale took place but we do argue also all of the actions including actions after the sale simply there simply was no waiver in the closing argument at eight to six or six two which is page thirty seven of the closing argument the point was made to the court that there were two alternative ways to prove patenting the court actually as confirming questions the court's questions were confirmed and then that the assertion was made that that had been shown we do not have a closing brief for you your honor because the district court didn't permit briefing at the end of the case so the closing argument was a last opportunity to address the issue and it was clearly address there as it was in the preacher operatives as it was in the testimony of our experts publicly was the details of the formulation with the need tails of the formulation disclosed in the phase three trial they were they were disclosed obviously to the people who were conducting the phase three trials your honor if people who are administered in ministering to trials subject to an obligation of secrecy yes they were here on class so there was no disclosure in that sense during the trials but the point about the the publicly public nature of the disclosures in this case is that this court in medicines company went through a careful analysis of what's important about the onset of r and what's important is that commercial marketing not start at the active commercial marketing not start in advance of filing for a patent that was made very clear through the review of the precedent in this case and through what the medicines company case actually decided that it was clearly free that is the invention of this case there's no question of but what i'm what i'm speaking to your honor is this statement in the medicines company opinion that confidentiality is a point to be considered and if it's a point to be considered in the ranges of confidentiality are formulation this testing that was being done this contract that was out there and the significance of that your honor is they are trying to benefit commercially by having a press release by announcing the fact that they have this agreement in place with m g i two to sell the product they have that out there now in the overall scheme of things what does that tell us that tells us that the confidentiality here of the formulation itself is of limited help the otherwise available to the public clause change the meaning of on sale that has been established in this court over the over decades literally decades war is a district court correct that the scene or series qualifier can it has anything to do with this because once you take away available to the public you're not left with a category just with the word otherwise well we would say that it's otherwise available to the public the phrase that we're dealing with that people are saying ought to apply to the early earlier items in in the series well it has to be available to the public and just be to the public right  if it's available to the public you have the same problem that you would have otherwise your honor and that is it available to the public well your lens of the trouble you have is that the you're left with the word otherwise which doesn't mean a thing as a as an item in the  word that isn't a category one but if that were true your honor if that is true what you have still is a category of art that is separate and distinct from the art that set forth in the four categories that existed prior it would fall into that category one so for instance back when this was first drafted this section was first draft of the the predecessor section in the fifty's we didn't have social media we didn't have computers we didn't have tweets and we didn't have videotapes all of those things are now potentially within the publicly available clause because it just reaches anything that is otherwise publicly available and so that is what what a fair reading of the statute is is that all of the categories of prior art that are set forth and in new want to a in a want to to a are categories that existed previously and were defined by this court and others over decades then you get to the last category and it clearly is intended to expand prior art it's intended to meet new prior art and look into the future about things that we can't foresee right now and say that if those things amount to something being publicly available that's going to be prior art as well and you don't have to use you don't have to have a say oh well but you could have something horrible to the public even in the absence of those activities you could have something in the public yes in the absence of those activities no those activities like an oral description at a conference i would assume something like that would fall within publicly available your own so what you have the four categories that always existed and no change was made in the law were related in the wording related to those four categories and it would have been an easy matter for the congress to put the word public or some form there of around the words on sale if it hit intended to change the decades of precedent that existed with respect to on sale but it did not do that and it's presumed congress is presumed to be aware of that the existing well established definitions of the law that are in that are in at that are in existence at the time of the statute this perhaps they could have done it and they didn't and do it and they did make changes they did make right relevant to this prior art for instance they eliminate the geographical restriction so they took out the geographical restriction when they wanted to make a change in that they made no such change with respect on the on the on sale and so it's an odd way to say the least to go about making a drastic change in the law by retaining the exact language that exists previously not only for on sale but for the other three categories of prior ar that this was not an offer to sell you i guess your honor i think this is clearly an offer to sell and very different from the contract that was considered in the medicines company i'll start with the recognition the medicines company case where the contingency would is determining what the product would be as opposed to something like shareholder overall are some other outside aspect in other words you still had the product defined just at the price to find and your contingency was something totally different that i've seen a lot of those cases but if you've ever seen a case where the contingency was what is the product we're even going to sell and i all i have to cite for your honor is the u c c itself where it says that contingent contracts are still contracts for the sale of goods and i don't think it makes a different well the difference whether it's a contingency for what the actual product was were contingency for something else because in this case there were only two but it's possible that it will never happen the point is that the contract was entered into and in entering into the contract what health soon did was start the commercial marketing process and they start of the commercial marketing process by lining up exactly how they're going to profit profit from their sale of the product and once they start the commercial marketing process that's when that's when the on sale implications sell but you say once they start the benefit is not enough is in distinguishing the situation where there's a manufacturing agreement and a manufacturing agreement is can be said to offer commercial benefit because you're stockpiling we're doing whatever to get ready just to market the pro but with the distribution agreement and this distribution agreement in particular we're talking about the way in which helston profited from this drug it's sold to the district to the distributor n g i and when it's sold the distributor  and sale agreement it's specific laid out as a purchase and a sale and as long as there's a bill or a contemplated future purchase and say right yes and i think for that agreement there was no exchange of money that contemplated the exchange of an agreement that's going to happen in the future it is said an agreement for the future sale and so that is true but under the precedent in this case one of the you see and in this sport and under the u c c future sales are still who could you help me tell me what the status of the f d a approval process was in april at the time the agreement was signed in then also what the status of the if the approval process was at that the to make sure i have this precisely but i believe what the evidence will search what the evidence was was a face to testing had been completed that the protocol for phase three testing was being approved i believe the face three testing actually started in august and then the initial test results were revealed in january of two thousand and two but for the critical one it wouldn't what is the approval rate of products for the f d a once they go through a successful phase three trial and you're out of that's not information that's a record in this case but the phase three trials and f d a approval real he isn't the relevant consideration for purposes of ready for this court has made clear and honest in that i think the question is coming back to what judge o'malley was raising as to whether this affects the the question of whether there was an offer for sale given the contingent nature of th that they had gotten approval to go forward with face with phase three testing to get to phase three testing they had to do testing and they did testing on humans which showed a reduction of emesis in people who are administered the drop they told the f d a that that was a clear demonstration of efficacy and so when it went into phase three the expectation was clearly that it would work and when it came out of phase three before the critical date there was under this court's precedent on enablement ready for patenting and talking about the sale i understand but i think that the two come together because we're talking about ready for patterning and a sale and when did the two come together and my  proposition that you can even not have any clinical data but just have a protocol for clinical data and that's sufficient to conclude that enablement has been satisfied so using that standard going back to april or may please the court will have been on behalf of the united states government has participated in this case to address one issue that is whether a transaction must make an invention of billable to the public to trigger the on sale bar as congress revived it in the end i know you have to rely on all this legislative history but aside from i think one statement by senator kyl and it's all kind of in big us sister what it talking about in terms of public say on other words here we have a sale which was public the only thing that was not on was the exact form and it's not at all clear that that kind of distinction was something that was apparent to the to the senators and expect the exception of one of the top statements doesn't make clear whether it's dealing with the situation in which the city hall is public or whether it's dealing with a situation in which the sale and all the characteristic residual as well now the house then three weeks later three weeks after the senate passed that bill the house introduced a new bill that adopted the residual cost verbatim and if there were any doubt the house meant to adopt leahy and kyl made on the floor so i think that although we don't need to rely on the legislative history here i think the legislative history is absolutely clear this is what congress intended when asked the residual so so in europe you if there were a sale  first in the zola on condition that the sale be kept confidential are not qualified for the on sale bar and off so i think it well might it well might and the question that the court would be faced with in that case is whether or not an interested member of the public would be able to learn about the invention as a result of those offers for so that's part of my family is that the question here is not third from you is not so much to use it in connection with their chemotherapy treatments and they do it now is that interested member of the public but it's a confidential say so we believe i'll do my best to answer your honest question we believe that the existence of confidentiality agreement depending on what so i think it depends on a number of factors and i think that hands on if there's confidentiality agreement that is relevant if there are any conditions on resale that may be relevant if the offer was extended even if it was confidential if it was extended to many instruments and there and was single sale or offer her sale but because there were no conditions on resale the inventor was or the buyer was not under any obligation of secrecy the supreme court determined that that was a sale so why isn't the past it it does not need to be in to an end user we can imagine a sale to wholesale or retailer that might make the invention available to the public if the wholesaler retailer was under no obligation of secrecy if there were no conditions on resale that we think that that sounds at least like a sale that makes the invention of ailill to the public in that an interested member of the public could learn about the invention by virtue of the sale oh do you think the sale in this case was an invalidating make the invention of ale to the public they may have announced the fact of a sale but but that did not announce that the existence or the fact of an invention to the public and that is the relevance in pre under the i a e a but we do not want to if this court concludes otherwise if this court concludes that this was in fact a sale that made the invention of vailable to the public that will not cause us any heartburn our primary concern in this case is to make sure that the court recognizes that under the a i a there is a but let me lead up to it with with what the hell she knew prior to that and again you know the background is we have a sorry let me just ask you one question so to make sure we're on the same page you agree with the with the writing theory that another words that is the contract existed in april but you have to consider the events that happened after that the contract up to the point of them are they right if your honor that's fast but no fourteen and they say you know an offer for sale may not be an offer for sale if there's further development work that had to be done after that alleged offer for sale and space systems sites faster that footnote for that exact problem is the actual different point  right then into a ballpark at the time that that is ready for patent if that happens later i think it can under the facts of this case not and i understand you don't agree with the hypothetical but the fact the that at the time offer and that after the offer there was an eventuality that was ready for pat before the board yet that's sufficient to create a vault right correct ok now why is that not the case here well it's because how the contract was structured the definition of product is registered product which means approved by the f d a or the canadian equivalent in this case they said well are currently registered products for review on the point two five or the point seven five now what could have been a registered product no registered product existed in april two thousand and one could have been either of those it could have been either of those the license agreement clearly sets forth the probability that no product gets registered in both parties accept that fact and walk away or it could have been some other product that they took after a failure in phase three and then became suggesting that the contract that was entered into here was in finding under the u c c i have no opinion on on the u c c application i'm merely talking about the certainly future contracts can be binding under these facts i look at it like was the point seven five milligram product the subject going off or oversight on whether the agreement was binding i mean surely you must think it was i think it was binding but at the time i was entered into there was no entity that met the definition of profit point seven five which was listed as a currently registered product our future register product never was a crude so was it the subject of an offer for sale it never met the definition of product and we submit that the point two five only met the definition of product once it became f d a approved i want to go back to your question i don't think i addressed it fully about phase three data doses tested with respect to the point two five milligram dose there was no statistical significance showing that there was actual advocacy for that dose and the standard applied was not f souter were quote scientific standards that he thinks opposed as defined by plaintiffs would embrace in the court further said the court found that the lack of efficacy for point two five milligram in twenty three thirty and this is at a one fifty four to five was quote a scientifically valid observation oppose it would make when viewing that documentation when there's an end of phase two meeting with the with the f d a subsequent to that the f d a says quote and this is at eight one zero nine one zero it's quote questionable whether the appropriate pallo dose has been identified and with that as background health in the side what are we going to do for phase three they decide at one point that they have to take three doses in the face three point two five point seven five in two point zero the lower doses were known to be more stable but they were worried about the efficacy of the point two five so they thought they had to bring higher doses into phase three the district court of a one five six said this was more cumbersome and expensive endeavor taking truthout says in the face three if they had confidence about point including well developed and and complete statistical analyses of the day and that that's what brings me to the preliminary phase three data that they had in early january as the court observe a one five seven she found and as a factual matter having listened all the testimony in view of the changes in methodology that were entirely possible as both science experts agreed those it would not have been surprised to see those values change and they could change the not that study from a showing of africa see out of a showing that just and that was the standard bowl experts apply in talking about the enabling data he's very much talking on the same page as dr pepper specifically he's talking in and i'll give you a citation it's a fifty seven fifty eight transcript sixty one line three to sixty two line two he's very much talking about that the statistical analysis of that data and what was that statistical analysis he talked about the papyrus they used to use that in graduate school trying to paint the work for its intended purpose and remember there's all this doubt dr color ari testifies about all the debates within helps in about what doses to take further into phase three and of course the f d a saying we don't think you health and have found the right though she and so that's why they had to do this converse some trial where they took two doses to two all these different centers to try over those says in each of time as the court noted it occupied seventeen volumes in the n d a with the pendency these and then it was that was in july of two thousand and two our date being late january of two thousand and two and then approval follows in september of two thousand so in of course there was a second phase three trial that was also being analyzed that was behind ninety nine zero three and in the timeline  milligrams showed statistical significance versus versus control in that in that phase two study with respect to face three even after receipt of the preliminary data if you want to look a helston issues a press release in january sixteenth of two thousand and two and says we're analyzing the results of phase three and we're hopeful quote hopeful that that efficacy will be found now with with respect to the n g i i think you're correct judge o'malley that underpin ray kohler the fact that they received monies in connection with the separate license agreement does not make that constitute an offer for sale royalty in milestone payments i just want to set them aside before i talk about the rest of the agreement so we're through with respect to the other part of the agreement the purchase agreement you know we think under these are mere preparations for commercial sales they're confidential which under meg has not a talisman but is indicative of it not being commercial offer for sale but more to the point of the policy in mexico mike client helston at that time and never sold a product in the united states they had no market marketing and distribution capabilities in the united states so in that regard the right i agree with that however under mexico that seems to be no principal reason to apply and on sale bar rule differently to helps and then to say a fines or who has in house marketing and distribution capabilities and similary are analogous to a contract manufacturing agreement meco i don't think we should of by a different set of on sale rules two to percent of the people in testing that had been done and completed prior to the critical date here were shown to have successfully received this drug ads beyond sufficient for the enablement standard  have in this case with respect to the government's argument about the legislative history i would just point out that in two thousand and seven the bill that the government was talking about there the on sale language had not yet been put back into the bill and if you look at the drafting history of the section on sale gets added because representative lawford said you're a limited eating some important areas of prior art then on sale went back in and the legislative history after that point is a perfect example of what the supreme court talked about in the exxon case where there were strategic manipulations by senators who were interested in a particular getting particular language into the bill into the law and fail so they strategically manipulated legislative history to do that and exxon i submit is this applicable here and the legislative history is not of much use to this court in resolving the dispute the m well this was far beyond a mere preparation for sale the distinction between the manufacturing agreement in medicines company and the distribution agreement here is that the manufacturing agreement and medicines company the medicines company was paying to have it manufactured they weren't profiting from that that they were certainly getting ready to profit that was a proper ration for sale but this distribution agreement was about actually selling the product and making a profit getting ready to make well only because it was a sale that had not happened yet and because of it fell into the category of something that would happen in the future but the catalyst that different and i mean it how is setting up a distribution channel different than getting your distribution channels and reading if you have in house distribution the difference is that i presumably in the example of pfizer the in house distribution network is not something that makes money by transferring the product to that in house distribution center what's different about this case is that helsingin sold to a third party sold it and actually started the process of commercial marketing and making a profit off of its product process begins and here it's a perfect example of a situation where health sort of started its commercial marketing product before it filed its patent application it is a case that exemplifies what the on