may it please the court this rule relies on assertion of s t c power to selectively impose notification all but ations on a single industry power that f t c never claimed for four decades and one that if accepted would fundamentally rewrite the heart scott rodino act in central to understanding how that act operates congress purposely divided the question of what is covered from the question of who is subject to notification and as to the first what is covered congress in the act gives the f t c the authority to define what constitutes an asset acquisition a congress treated the who question very differently and you know you say this is a chevron one case right there somebody help me think that through a bit and you do it based on your no person language or the new person lying to the set you says leads to no other conclusion than the one you're arguing for and that isn't the the f t c cannot make these industry specific rules that would help me understand that or why is it so clear i mean it seems to me it's a it's not a bad argument perception or interpretation but you could do better than that under chevron you've got to say that that was the only reasonable interpretation come up with half how is that the only reasonable interpretation your honor i think it's because those who question is the cited both based on the no person mandate and then the other part of the statute which who is address exemption authority on verse is quite clearly trying when it comes to who is subject to notification no person may have a notification except as exempted either by congress itself directly or by the commission upon a rules we have never said that in industry specific reference work definition is absolutely foreclosed and there are two important things i think to keep in mind about the insurance and banking the first is that that's an example of pharmaceutical industry or all other industries except for pharmaceutical industry and it is in fact a direct imposition on a single industry so when we have the no person mandate combined with expressed express that says if you want someone to not be covered once you define something to be an asset that's the one question f t c sole authority to address the who question comes in an exemption that's targeted at a particular industry in says that in these sort of partial exclusive licenses and does so at a value level what they call the cost of these partial list lists of licenses transferring all material commercial right it's high enough to trigger the thresholds is the pharmaceutical industry if that's a determination that you're the only industry that does that at this level you have things that are this valuable that you can get less than the entire right and split up some of  the rights manufacturing from the others you're the only ones that do it why should they have to write a rule of prime that says i want them there is nobody else i mean they can they can say any question but there'd be nobody but the pharmaceutical industry will have the simple answer is the designer is the requirement the congress gives it is a prophylactic statute that it's very nature assumes that the agency doesn't know everything what industries might arise  industries are after that it doesn't have experience with as it claims it doesn't have experience with other industries with this transaction but maybe another way to look at it is if that really is true in the pharmaceutical industry where the only one where this kind of transaction occurs which is not this case that d concedes that they typically see it in pharmaceutical industry not that it only could were does exist here but even if that were the case what would be the harm or what benefit would there be maybe is a better way to ask you in doing something different than the way they've always done it the way congress expects fine the terms asset acquisition and and you know we're not sure whether there are a partial list of license we'll have the commercial value will be able to figure that out in other industries and we it's never happened at least at this value level is fifty or ninety million dollar value level and we want to be careful in deciding where and these types of unusual asset acquisitions our asset acquisitions for the rest of the purpose of the statute we've got experience here at this is this is valuable stuff in the pharmaceutical industry and they consider it an act by for practical purposes an asset acquisition for them and it triggers these concerns we just want to be careful well you're out of the the answer is that congress that when you're being here for when you're regulating incrementally you're carving away not adding to when there's any her way how can they decide that there's no anti competitive implications for industry practices they've never seen that things haven't found anyone who's ever done it so how can you assess competitive nature of something that's never happened to their knowledge because that's the whole point of the horse doctor of you know is to bring notification so that the agency will gather that kind of information they're going to gather it i mean because people have to file with notification if in fact it is an asset that at all because what an exemption requires is a specific point is what congress does the to be of the statute you have to show that whomever is exempt that is not likely to violate the you know that's exactly my point so if they had and said it instead of defining outside acquisition they had said this is a pool of pies they'd written it as a generic rule any person instead of any pharmaceutical industry right that was generic rules just like you want and then they passed another determination right but it's awfully broad authority that's running up against your no person argument no that's because it's a difference between what and who about according to find what an asset is which is the way they've always done it this is the first time they've said well we see prevalence of this sort of transaction in the pharmaceutical industry they back that up with sixty six filings that they don't dispute in bulk none of the kinds of transactions that are at issue here because they arose under the prior rule murder straight up patent because of patent licenses they cited a database that they themselves recognized only has a tiny fraction of the increase by unknown people for unknown reasons they don't say how many if any of those involve the kind of transactions that issue here fit within the group they can be covered too so there's no discrimination to any way patton i'm just not following they can be no longer who if they were writing that only this industry does that's who they have applied for its entire history is to say even if there's only one who that we can imagine we write a neutral rule if it turns out that we're wrong or that an industry emerges that with unforeseen congresses said if this is an asset acquisition predicated on the idea of general neutral regulation even if there's only one who because if there's only one who the general regulation is still going to only capture that one who there is no harm the agency doing something like this one for the church down here of that would be a different case what they say is we typically see this in pharmaceutical industry don't know why they don't have experience with other industries they don't say that other industries this could never arise were or does not arise in fact most of the data that they're using and this is both in that regard just a matter i have no idea but imagine hypothetically industrial solvent seen gains in these same types of transactions and aren't covered how is your client hurt since you don't seem you know it is a separate question the one question if this court vacates this rule as we ask it to then if the agency has speculative whether it even would try to impose the general rule that it threatens to do then the industrial solvents and everyone else would be able to that is targeted the reason that this rule is unlawful goes that it goes about notice and comment rule making you see precedent on the cheap we're going to target one industry so that really only one industry is on notice that he's on it in order to be able to label something that we've never had good what we're going to do is what expanded to everyone thereby prejudging the notice and comment that would occur when the whole world is subject to being able to say give these transactions happen and frankly that would be a pretty good way to find out what they say they're ignorant of right now we don't know about these transactions in other industries they haven't said it never happens or couldn't parent pharmaceutical if they pass a general rule and only pharmaceutical industry has any skin in the game and probably only the pharmaceutical industry would comment but we don't know that because they have you have unclean power that subverts the structure of that if they if you do that if you recognize this is a new uncharted step one is not lawful based on what congress was trying to achieve and what it did in the statute if they want to go back  impose a new rule would be a neutral one by the all injuries they set up themselves then we would be in a position to finally have a rule they'd have to reveal all of their data where we end all of our sister industries would be able to comment as to why this definition of a acquisition is improper that really the case that's the what question what we've gotten in this case before the court is the who question can they bake who into the definition of what they've never done it before they shouldn't care tax structure and purpose of  making the direct standing argument because they are asking for more of the rule and if that were to happen then there would not be a rule for the commission to enforce this so why some juries and why mention it at all because it does highlight the very odd nature of their argument where they haven't challenge the substance of the rule or frankly even whether they can be required to report these sort of transactions what they're arguing is a the rule is too narrow because we haven't regulated everybody else and it is very difficult to see how the pharmaceutical industry is to buy a rule that they don't challenge the substance up but because they do ask  for which we don't think is appropriate even if even if this court were to agree with some of their arguments for the reasons you state in the brief if the court were vacated there would be redress available to them so that's why we don't make full frontal  on that but your honor is i want to spend long on the show run argument unless you have specific questions i know that that that that that their argument depends on inserting a lot of extra words in a lot of extra explanation industrial solvents company to be exact same thing that if they were a pharmaceutical company they would have to report the exact same they're an energy drink pick your hypothetical but any of these companies did the exact same thing right now requires them to do that that clearly is a rule that requires them to report at all no there is the general informal interpretations that the machine has advanced now if if somebody were to come to the commission with a as as happens merger notification office and kind of laid out here's a transaction that i proposed and and it's outside of the pharmaceutical industry but it looks very much like the sort of transactions that are covered by this rule the pre merger notification office would likely if it saw that say we think that this is something that that you should report and i should mention i don't want to run companies i don't want to report that's ok with a lot of paperwork it's a lot of delay and you might throw a wrench in the works i think of the if it started to death this information could then decide whether there is a gap there that it needs to fill with another with either a broader rule of this or another rule that addresses those circumstances but but you know it's better right principle of administrative law that that is fallacy of farmers argument is that if there is not a rule in place that means everybody else is automatically exempted by saying that there's not a rule that that squarely tells people that mean gauge and similar transactions which the commission has not found that says that they necessarily have to report does not mean that they are exempted they're not off the hook there's just a question as to whether there is sufficient guidance or affirmative obligation to for them to know that they have to file the commission can if that gets additional information and starts to see these sort of transactions happening in other industries because it has not exempted other people it's just said right now we don't have enough information in order to to to say that we need a rule and what that rule might look like and so if it does in fact find find those transactions in other industries it can then formulate a rule but he has not that everyone else take action to enforce even in the absence of rules so for example the broader the broader rule that informal rule that the commission has always advise parties that exclusive licenses under the under the may use and sell that entire bundle is something that is reportable there is no formal rule that says that but it is well established and the commission if if if there are industries and pharma is where it principally sees those those exclusive licenses it could bring in action under the aegis our act itself even in the absence of a formal rule now as well as it right before the fight would be on notice yes but it does it does not mean that because there not just that for a whole pattern it's for for the rights to part of a patent and the question of what part of a pattern you're talking about in this case we know that this is how the pharmaceutical industry transfers rights either to the entirety of the patent or part of a pattern and we can articulate it with a very very specifically in a way that provides them guidance to do just a very broad pattern or part of a patent that might apply to anyone else who possibly does this although we haven't seen it that could engender a pretty a tremendous amount of confusion there may be over reporting by people who say oh well i've never thought of this is this part of a pattern not part of a pattern more maybe will be cautious and report if there's a tremendous cost that comes with that and well there it does exist because the commission has has explained the basis for its reasoning is that in its in its experience administering the h s our program and it has described the nature of this experience the exclude the the pharmaceutical industry not from others that that is sufficient for both the pharmaceutical industry as they did to challenge the basis for that that decision by say no as a matter of fact we think that other industries engage in this and they retained an expert who reported to do that the commission found that his arguments were not persuasive for the reasons that we stated in our brief that  information for for pharma to test for this court to understand the commission's rationale and the cases don't require anything else you know that determination of this sort which is not based on on on technical studies empirical data it is based on the commission's cumulative experience over years of administering the program why don't we require the agency wants to make this type of terminations under the statute to very difficult thing it would certainly be costly if we haven't seen a problem and we're an agency you know we're we are the agency that people bring these sort of questions to we're also informed by the department of justice  trusted visions experience that is an ample basis to to to get the sort of information that we need it would be it would be costly and frankly pointless if we haven't had a clue up until now from all of those sources of information that there are these transactions elsewhere and i'm sorry it's just seem a bit more affirmative than the federal register which had words like typically left me a little bit unclear as to where they were actually making a certainty that nobody else does this why what if in fact there were one other it doesn't happen often but one other time you were aware of one other time that energy drinks or whatever did perceive agencies perceive a problem they can make a rule to address the problem just because there's a there is perhaps you don't want to you know making any determination of other industry when it doesn't doesn't present exact same anti competitive concern without making that determination how is it that you can go ninety five percent of what we see is pharmaceutical so when pharma does a it's covered other folks we're not of in fact we're just letting them out of the regulation well we always have the problem of drawing lines you have you can't regulate you can't can't try to regulate everything that might might potentially be a problem or act says nothing about whether the commission in deciding how to define these these broad undefined terms in the act and defined them in in the specific context in which understands that and that as the commission said in its rulemaking it may be subject to further rulemaking if the commission comes to learn that there are there are other industries that engage in this and case well it is not a case that's true and on the other industries had the opportunity to comment as well you know mean that the rule was out there it's only related to pharma but but it was no secret that that what these sort of transactions were and we haven't heard from on the on the on the conclusion by the after you see that we've never seen anything else we're not aware of anything else and sometimes it sounds like you're saying that sometimes it sounds like typically right i commission said in its rulemaking in the last five years of the filings all of those have come from pharma what the commission has has really not seen from anyone outside of pharma is is that the type are not inside of the ninety five five percent case but we're deciding the as of now one hundred percent and in this i understand dr i'm not talking about the general exclusive licensing i'm talking about the subset of partial exclusive licenses or h if if it would be helpful i can sit down and take a look at it and imagine you with appointment and what you're the blanks like i found some sort of sometimes the language was more specific and other times it seemed a little bit looser and so that's why them to be able if they found this unusual situation where partial transfers of rights which might ordinarily not be thought of as an asset acquisition but in this particular  happens commonly extraordinary amounts of money are on the line and it raises the same in their judgment any competitive concerns as a full grant of exclusive licensee why would congress have not wanted them to be able to do that because congress pas interest all right for the purpose of ensuring that the commission would have notification of high threshold dollar amount transaction regardless of who has that particular bundle of properties that that outside of the commission would have notice and the hit notice from whoever wanted to pursue that transaction regardless of who that person was or what industry thinking from or whatever and so there was a specific tool that was given to that the agency in eight as the exemption clause in his as you can exempt classes of transactions so for instance they could if they really only wanted to get to focus on transactions at an even higher amount than the threshold there are some exemptions like that that could be you know neutral as well but would capture what you're saying the agency would want to see you know it seems a little hard to think why congress would if they if they determined and you can tell me if you think they didn't but if they determine this is the only one we look we can find we've never seen one this is the only one that the only way the agency can be specific and clear about what it means by asset acquisition in this context is walk in passing that regulation pass another determination and if anyone else in the world does it we don't think that's any competitive one congresswoman to be very very careful before making that if anyone else is out there doing it we don't know about it can't enforce against anyone including the pharmaceutical industry any highly separate from the parts already know what we're talking about is the notification and what they said j a seventy seven you know this kind of transaction is non report until this rule which makes it reportable exclusively for the form suitable industry it is not reportable for any other industry because of this rule but it is for pharmaceutical industry exact same transaction no difference in dollar  difference in any economic and we don't know if there are others out there we don't have as much experience you know i page forty but no ten of our opening brief is a few examples of how the agencies that we typically see it almost solely see it almost solely of hers in that industry as a far cry from no person is exempt from notification and less specific league zip it under a particular statute that's all we're really asking for is that this fine what eleven thousand dollars a day i believe from the day in which they were supposed to report you can see that for the pharmaceutical industry are pretty serious burdens here but the cost of complying with the morning it's anything we can why has he done one that's another purpose of our star is to make sure that transactions don't go through without notification because they're so are you on one of those make it to the one question but the question really is what central here there's no basis in this record to say that prevalence exists there's no basis to say the prevalence of the proxy for and i trust risk if we start to get into the realm of selective imposition and because it violates the tax structure seven i guess the clearest articulation would be the statement in that first paragraph under a limitation of the pharmaceutical industry that piano has not found other industries that rely on the set of arrangements so you think a seventy seven and i took my regula