was a signal to us that you are not concerned about this matter that the parties debated about whether california motor transport and professional real estate investors do or do not have a different test you're willing to say as we did  futures that objective baseless miss is a factor yes that's exactly why i'm addressing it that way your honor because we can on the basis of the facts that we fully embrace and not in any way push back against futures exchange futures exchange does have some observations in it that are different than some other circuit courts but what i'm suggesting quite clearly i hope is that regardless of that suggested difference when it steadily cases with biosimilars agreed to an entry date of two thousand and twenty three the vast majority of the mine field had patents expire well after that meaning from abby own point of view that it did not have a good enough shot to be able to extend the patents any further so your need let me again just to nail this down obviously we're on twelve b six review so that gives a certain perspective on the facts so i take it you're saying that a logical inference from the fact that at the may have been giving up eleven years worth of patent protection some of those patents were not going to expire until two thousand and thirty four and categorized the patents by tight and you'll state that at least the top the bottom two categories have patents that begin their expiration dates well after the agreed entry that the end of the wrist the manufacturing and the other abbott never went to a file on a single claim on a single it did not even go to summary judgment on a single claim or a single patent it did not even proceed to a marksman hearing in other words when push came to shove and the think five or six of the biosimilars without the need of a similar is to even go to litigation so for those reasons as well as obviously as we do that the number of patents the pace of the sibal this is something that's been bothering me as i've read both the district court's opinion and and the briefs the district court and your opponents both except i'll take them collectively accept the proposition that if somewhere in this group of whatever it was one hundred and thirty two some odd patterns if there was one even one valid patent that you lose on this point  i would like you to address that aspect of the argument so burst you know that there wasn't a silver bullet because if there was a silver bullet you mirror would not twelve the six that we have challenge the patents and therefore there's no presumption of patent limit we also know from the supreme court it is me i'm i'm getting more dark why is there start there starts with the presumption of a litigant puts the burden on the plaintiffs to challenge the in this situation we don't need to prove the challenge not simply to file a complaint it's not a bursting bubble presumption theories it's a concrete question are you proposing to prove that every single one of the patents is invalid well and let me just add at least for my part of that question and i easterbrook we intend to prove that more likely than not one or more of the biosimilars would have prevailed against all assertions being made against them in a manner such that they would have been able to get to market prior to two thousand and twenty three well can i just add i take it that not every patent in this package of one hundred and thirty some odd was being asserted were in the patent dance against the biosimilars those of the past i wouldn't matter just it just to tie this up if eighty patents were asserted or sixty patents were served against you it wouldn't matter if the patent outside that group of sixty patents happened to be valid because absent wasn't reliant on that it wouldn't matter if it was outside that number one number two it wouldn't matter if it had expired before two thousand and twenty three it wouldn't block it  and yet the supreme court rights but we don't know what the end of the day if they would have survived infringement charges or invalidity charges or other sorts of things you would say about it yes so the  infringed or whether it's not infringed and given that probabilistic d nature if you will the negotiation between the parties ought not be influenced by some external reverse payment but should still instead be based upon the merits counsel of that that's one of the things that worries me about this case and that the validity of patents in litigation is probable list but let's suppose that there is a ninety percent chance all of them are invalid that number is a standing only small so if one is making a probabilistic judgement the probability that all a one hundred and thirty dollars plus are invalid despite each having been issued by the patent office is pretty small doesn't that reflect somewhat on what's going on here well it really is that if you add up the need to be able to  do this exercise by group on the assumption that the groups are dependent within them but independent across groups it is then something like the zero nine of the th power which is also pretty  small under the assumption that each of those groups is separately meritorious and i think that what we've got legend what will prove is that when you look at the groupings of these patents you actually end up with not as many groups as one would think the formulat not and i do think we also please have shown i just just to clear this up again i mean i think this could prove to be important one way of looking at this is to look at all one hundred and thirty two  another way though is bio similar to biosimilars so that there could be patents out there that are completely irrelevant to bio similar company number one that may be relevant to buy a similar company number two and i would imagine your complaint would go forward if he even some of them were being kept out of the market yes exactly it is by a similar by similar in terms of who would have been able to get to market earlier if they were able to win the patent assertions or they were able to negotiate an earlier entry date going back to judge used books question what i would suggest your honor is that we look at and again i also think that if you look at these actions it does not have the silver bullet or even the probable ability of a silver bullet anything that's going to go beyond two thousand at the time that the complaint was filed there were four approved by similar yet none were in the united states market but there was already robust entry in the in your at this united states i'll stumble is do not enter for five years after that two thousand and twenty three so don't you chat for a minute about the argument that again is made in the briefs and some of the makers pick it up some don't on other sides it's that one sentence in activists that says early entry if all you're doing is early entry then you can do that because a patent owner can waive  whatever degree of exclusivity that person has and then there's this discussion about the value that abdi was allegedly giving away in order to make this something that looked more like a reverse payment agreement pay pay to stay out as opposed to just volunteer to stay out and there's a side discussion about whether all has to be cash payments or whether it could be other forms of value so if you could delve into that a bit i would appreciate it sure so the sentence you're talking about said is the court has no problem with early entry a license that makes sense and then it says so long as there is not a reverse payment and it's the so long as the reverse claimant which is  position is going to be that the bias so much should wait until the absolute experts of the last expiring at the biosimilars position as they're all malarky i should be able to enter today and they should negotiate something in between simplistic that you want to speak your honor i was just going to say that the more precise you can be about what how you figure out what the value was in this case at least as you read the allegations of your complain that would be great so the value of the payment is looked at both from the cost to the brand and to value to the virus the more it has two dollars perspectives the cost to the would be whatever ability it had to key in erik's out of the market the biosimilars out of the market longer in europe and to be able to receive funds and we valued that in that complaint at hundreds of millions of dollars from the point of view of the bias kamler each of the biosimilars yes the value they get by entering some the market earlier than they might otherwise be able to  final point i want to make on the reverse and that is this the reason that it is possible that there is a trade off that is going on here is not simply because the agreement happened at the same time and that there life and that that's how we believe that it's plausible that is value you know use that happening the expression a sweetheart deal if you will on the european side and in exchange the united states there's a their position essential is that there is complete immunity to engage in this cross country trade offs and we think that as a matter of law you can't endorse the notion that it's complete immunity cross for representing our v my colleague mr toto we'll spend our last seven minutes focusing on any trust injury section one i just want to i want to start with this section one claim the  were exactly the kind of commonplace settlements that the supreme court last an activist early entry deals that open up competition before patent expiration and particularly  isn't this just the discredited scope of the patent argument that the court actually rejected an activist there is that qualifier in the sentence and if for example  the the value for getting into europe were one hundred times as much as projected litigation costs and other sorts of things why hasn't given away something valuable for this that i mean there is a unless you are really wanting to insist that the only kind of payment that counts is cash on the barrelhead which seems to me in today's world close to absurd i don't know why we can't evaluate exchanges of value you know we're not that we're not taking a big position that it has to be cash but our position is that it can't just be opening up competition that's a completely different kind of animal activists definitely drew a distinction between cash or cash income and versus early entry deals which are just opening up competition that's a completely different animal as the f t c said in its brief absent a reverse payment the settlements entry date presumably reflects the approximate the party's approximate prox mation of the expected level of competition that would have obtained had the parties litigated so that's what an early entry deal is opening up it obtains a value monopoly for the monopoly on the united states and then gives sample eleven years of monopoly in the united states also i mean these are things that can be quantified unavoidable for two reasons so we didn't give up anything and then in europe actually we got things we got well t's so in in europe if you just look at the plaintiff's allegations they're out pellet allegations in the complain states so naturally the earlier the date for entry in the e u will be earlier but more importantly there are no whether we did a deal or not the biosimilars we're going to be launching and eighteen in europe why why why so we're supposed to think they're just stupid then right because you said you're going to win anyway europe in twenty eight dollars and exchange you'll tie your hands the united states for an extra five years is that what they do know what my point is this what they're set the plaintiff's fieri is that we gave away something in europe an exchange of early days in europe in exchange for a later date in the united states but actually in europe and here's why there was going to be a twenty eight team launch because there was only two patents that still existed and those two patents covered for three  european market which of course operates a bit differently from the us market patents are national you're on aren't paragraph one hundred and ninety one dollars of the plain of the complaint they said there was only two remaining patents in europe those two royalties we didn't give them away for nothing we got substantial world he's in the three patent indicate indications that lasted for years and years if you look at the amgen agreement which is in the record docket just record doctorate  giving anything away we were literally getting royalties in europe look under twamley your honor you shouldn't be allowed to launch an enormously expensive any trust action based soley on different entry dates in different jurisdictions with different law have they put on the table enough for the reverse payments theory to survive and that depends on one's interpretation of activists there's no problem here or say but is it but yet they have to have a story that at paragraph one hundred and ninety one they said they have we had only two patents and those two patterns cover only three of the nine approved indications the amgen agreement is also in the record they cited it threw out their complaint and the engine agreement shows united states accepting the two thousand and twenty three day without getting the alleged reverse payment of this e u licensing deal and look under the law you shouldn't be construing complaints in ways that are they're saying is we don't have any patents left in the u k we abandon our patents in the u k that's a major market so there was going to be full blown competition in the u k what they said is that elsewhere we have two patterns that remained in existence and those two patents were narrow covering only three of nine approved indications in the e u and just to get back to activists your honor it was dealing with an entirely different scenario way that blocks all the other generics but there's nothing about the fact that an activist justice in your situation the deal allowed earlier entries sixty five months as i recall was was the length of time and certainly the argument was strenuously urged in activists that this could be nothing but pro competitive to let somebody and sixty five months earlier and yet that's not what the supreme court made of it i'm not quibbling with the fact that if there is in fact a reverse payment even an early entry deal can run afoul of activists are not quibbling with that what i'm saying here is that there's no plausible allegation that there was a reverse payment here i mean just focusing on the fact that both my when you do a deal with one party or the department of justice one hundred percent or there are certainly some differences at lax regime that governs biologics no doubt that there are many similarities  but this is an important difference that is important for the context that we're in right now when you do a deal with one similar it has a zero impact on the other biosimilars they can make their own independent judges judgments about whether to litigate at the end launch at risk or subtle and here nine biosimilars all agreed independently to the two thousand and twenty three u s century day two of them milan and bar injure did so without getting the reverse payment and that's in the plaintiff's complaint they do not allege that either milan or orange or got a reverse payment and yet they got the same two thousand and twenty three date there's another point to that this  palance there is in tension with the reasoning and activists which is the following part of the justification for the majority's activist decision is that you wouldn't need to do an in depth analysis because the theory went that the payment itself would serve as a proxy for the strength of the patent the higher the payment the weaker the patent so the theory went it here under the plaintiff's theory what they're asking you to do is allow the case to go forward a jury may someday have to decide based on foreign patents based on foreign laws whether or not the deal in europe was perfectly calibrated whether the date was right whether the  level levels were correct so this is a pretty dramatic extension of activists and one that runs squarely into the reasoning of the supreme court to look under under the plaintiff's theory allowing them to get to court based on differing entry dates and jurisdictions inside and outside the united states it would wreak havoc on is global security and how i mean that's a descriptive thing but i think the theory is simply you've got to look at each agreement this is what i understand you seem to be arguing you've got to look at each agreement and figure out whether there is value being transferred that could be called reverse payment if the answer is no then you're inside the safe harbor if you if the answer is yes then then you're not and there is more to the case doesn't mean that there isn't i mean they're obviously other theories or other aspects of the case that would still need to be looked at clearing the one your colleagues going to talk about costs of litigation for them to you're not the only ones who can raise the specter of very expensive litigation maybe they just figured well these other guys have two thousand and twenty three ads a signal that they're going to fight to the death for tw three so it's cheaper for us to just go along well look if you if you believe the allegations from the plaintiffs below it would have been enormously a lucrative for both mylan born sure to get in the market earlier if it could enormously lucrative and it would it would have paled to litigation costs and yet they didn't do it they accepted two thousand and twenty three ok if the result here is that all you need to do is have different dates in different jurisdictions you're literally telling the pharmaceutical industry they had to global settlements because different dates you can launch in on a trip and then you trust action and the law should require more than that let me turn to section two if i can plaintiffs are relying on the sham patent exception which in the u s futures this court call extraordinarily narrow one key point i want to make here is that the argument below from the appellant's was exclusively california motors they literally it's what i call a needle in a haystack theory that if you throw enough spaghetti on the wall somebody might discover that there's one strain that's organic solely and so really good even if all of the rest of it i just plain old durham wheat and no good and it costs a lot of money to sort through to find this one little gem in there and i think that's part of their theory that that reminds me actually classic any trust theories of predatory acquisitions which has been part of section two long law at least since the standard oil case so a long time so i'm i'm are arguing that company by company it wasn't everything that there were patents that were expired there were patents for green ingredients that didn't even play into the manufacture of something that there was all sorts of reason to find both object of baseless pnas and the requisite subjective intent your honor they're only alleging that there was only three lawsuits so they're only allege and they're alleging three sham lawsuits now an appeal under pre even though they literally said to the district court we do not assert a claim under pre but they're alleging pre and these three lawsuits were filed after the biosimilars initiated the dispute after the biosimilars a greed that a litigation was necessary to resolve at least one patent dispute and two of the lawsuits involved i p r battle tested patents your honor hounds obviously are parties were view it's a patent office proceeding where the st step is an exceedingly low bar all the biosimilars had to show that they were reasonably likely to prevail on just one claim in the patent to move forward fifty pages of reasoning from the patent office affirming that they couldn't even get past step one for nine hatton's for nine patents that just shows the but that that is the kinds of injure five per side and what they said is under the statute they believe those atoms should be the subject in action for patent infringement how can it be a sham lawsuit when your opponent invites the litigation because they want or sandals stayed out of the market even though they got f d a approval for over a year each of those parties stayed off the market because they were respecting our patent portfolio they did not launch a risk to say that under these circumstances the plaintiffs have adequately ledged that we don't even colorable patent claims for these lawsuits that we don't have that are lawsuits were objectively baseless there's just nothing to it all they do in their complaint is alleging garden variety patent defenses with no elaboration or detail that cannot possibly be enough or otherwise every patent lawsuit would be objectively baseless because every patent lawsuit defendants raise defenses that just can't possibly be enough and in down below they absolutely made it crystal clear they were not challenging all of our patents they said many many the majority  this is not a situation where the plaintiffs have somehow wedge themselves into the extraordinarily narrow sham patent exception to nowhere panicked and i see that my time is up sol turn it over to mr toto section one reversed payment allegations and and as mr hurst said i'd like to focus my time explaining why plaintiffs have failed to allege causation or or injury in fact with respect to section one claim and complaint describes that us as an impassable patent think it points argue that the you merit patents would fust rate all would be competitors create a roadblock to entry and prevent bio similar looking at causation and creating a budget for world you remove only the alleged wrongful conduct and i think this point is maybe gotten confused in the breed's but for the section one reversed payment clearly that means is all you removed is the settlement agreements that contain european entry day components with which plaintiffs allege is the painting here everything else stays the same in the but for world so the issue is if you remove those settlements with the biosimilars have gotten through the impassable thicket and also would they have done so in the timeframe that matter and while the court must draw a reasonable have had to even talk to you they could have waited patiently until the patent expired in two thousand and sixteen and if that hadn't been gauged in the creation of the ticket they would have entered or not you know as they chose to a business standpoint while that's true but for the section one claims they think it still exists in the but for world where you just remove the the the settlements that took place or remove the european component of that and you ask what would have happened we still had to find our way through the thicket either through an alternative settlement or through litigation when all of them which i'm talking about now are highly implausible based on the existence of that thank you so turning to both those are we we are not argument clean ok now we heard some of this are already plaintiffs don't dispute it's talking about the the successful patent challenge theory plaintiffs don't dispute in their briefs that it only takes one valid infringed patent to block entry and maybe as judge was pointing out maybe that's only the sixty or eighty patents that were alleged but it's still a large number of patents where you would only have to find one valid infringed patent to block entry so that that that he that allegation alone makes the litigation when highly implausible but there's a nd reason and  that's just the sheer amount of time and cost as as george would pointed out earlier that it would take for a successful patent challenge to take it to two to be completed now plaintiffs in their briefs talk about it and this wasn't in in their complaint either they talk about a four year time frame for the litigation three years to trial plus one year for appeal but that's only the  st phase of the patent litigation which involves only a handful of patents it says nothing about the nd phase of the litigation which would have involved scores of additional patents here and it's clear from the complaint why we don't start with your weak ones wouldn't you start in that st stage with the strong patents and then have left over the week one i think never is i'm not sure i'm buying that that there's a p at a certain amount of money flow on time so i want to briefly proc about the alternative settlement theory which is their their nd theory of what for entry all of the facts that make a litigation wait implausible mean at the biosimilars here had no leverage to negotiate for an earlier date and as mr hurst pointed out we don't really even have to speculate on what an alternative settlement looks like here because we have one in the record we know that behringer and milan settled for us only day they got no european that's the alternative settlement here that removes the quote unquote payment the european component and what did they get they got very similar two thousand and twenty three and three dates in fact later dates and michael i see my time is up ever launched early anywhere so what are we supposed to make of that if you're saying we should look at the fact that there were no trials they didn't test these at trials or pursue them in summary judgment what do we make of the fact that no biosimilars launched early when they could of what we make from it is that the scheme worked iran but i would suggest it was incredibly problematic for any company to take on even a minuscule risk even think even if it was objective li baseless totally objective only baseless they that you're saying they would've launched early yes even if there is a extremely a very small risk of loss one that one would measure your honor as something being completely not probable cause but nevertheless if you're staring at being the st by a similar to enter into a market that has sales of over twelve billion dollars a year you're going to run the course you're not going to take that risk that's what i would suggest and take and what is what is that contention based on we see an awful lot of patent litigation after somebody has entered the market your your view seems to be that everybody is so risk averse that no one takes the risk of patents who you know i think it's quite often the people take the risk in suits and i think that over time depending upon what company it is and what they will they take the risk because they hope to make a gain in profit in the market by winning the litigation short and so on a suitable company's presumably their shareholders extraordinarily risk averse compared to other companies shareholders i don't think they're one way or the other whether they're more or they're left right and even in this situation what i would suggest however is that one thing that all companies do  regardless of whether they're biosimilars or a small molecule generic companies is they look at the size of the market and or attentional exposure they will suffer and i think that in that situation with this so you're essentially saying probability times risk of loss is going to result in a number that for each of these biosimilars companies is you know like their net worth or something they're not going to do it it's going to see their profit  them and we also need to understand this market is somewhat unlike other small molecule market in the bio similar area by a similar companies are also in the position of being the biologics time will very differently than their very traditional area of traditional brand companies against you know pure brand companies against fewer generic opens mr sobel is it any issue a question about section one here the is it is it the players position that a brand can never settle litigation in the united states and litigation in europe at the same time consistent with activists without subjecting themselves to a lawsuit in the united states you know absolutely not so how could they how could they do it consistent with activists and not subject themselves to a lawsuit if a company decides that it wants to combine settlements you know prime one market in another market a company needs to make sure that it's settling and not trading off one against the other here and these this particular circumstance you have was a bully group that it's not competition on both sides but rather it's a sweetheart deal in europe and it's a terrible deal for americans but if there was if that was the test of the pleading stage couldn't you always pass that cast could you always plead that and argue that it was need to prove it just needs to say are you just need to state that it's plausible yes if i said prove i misspoke or on as i did intend to state that you have to plead and then eventually prove that it is a sweetheart deal on one and it's not on the other and what i would also suggest your honor is that you have to one and needs to ask oneself this question about global settlements particularly when you're dealing with a settlement in europe in the united states why are they together and i suggest that a big reason maybe the reason that they're together is because there is some kind of tradeoff that's going on well either that or they were sued in both jurisdictions well they could separate so they were separately suit and then separately settled my final well actually i'm out of time so i'm going to keep my final remarks myself thank you very much you very much