text:
    NOVARTIS AG, Mitsubishi Pharma Corp., Appellants v. TORRENT PHARMACEUTICALS LIMITED, Apotex Inc., Mylan Pharmaceuticals Inc., Appellees
    2016-1352
    United States Court of Appeals, Federal Circuit.
    Decided: April 12, 2017

      Robert Trenchard, Gibson, Dunn & Crutcher LLP, New York, NY, argued for appellants. Appellant Novartis AG also represented by Jane M. Love; Michael A. Valek, Dallas, TX; Alexander N. Harris, San Francisco, CA.
    Joseph M. O’Malley, Jr, Paul Hastings LLP, New York, NY, for appellant Mitsubishi Pharma Corp. Also represented by Eric William Dittmann.
    Teresa Stanek Rea, Crowell & Moring, LLP, Washington, DC, argued for appel-lees. Appellee Apotex Inc. also represented by Vincent John Galluzzo; Jonathan M. Lindsay, Irvine, CA.
    Michael K. Levy, Andrews Kurth Kenyon LLP, New York, NY, for appellee Torrent Pharmaceuticals Limited.
    Shannon Bloodworth, Perkins Coie, LLP, Washington, DC, for appellee Mylan Pharmaceuticals Inc. Also represented by Brandon Michael White; Dan L. Bagatell, Hanover, NH.
    Before TARANTO, CHEN, and STOLL, Circuit Judges.
   CHEN, Circuit Judge.

This is an appeal from the Final Written Decision of the United States Patent and Trademark Office, Patent Trial and Appeal Board (Board) in two consolidated inter partes review (IPR) proceedings of U.S. Patent No. 8,324,283 (the ’283 patent), owned by Novartis AG and Mitsubishi Tanabe Pharma Corp. (collectively, Novartis). The Board instituted IPRs on all claims of the ’283 patent based on petitions filed by Torrent Pharmaceuticals Limited, Apotex, Inc. and Mylan Pharmaceuticals Inc. (collectively, Petitioners). After reviewing the claims, receiving extensive briefing, and hearing oral argument, the Board found all original claims of the ’283 patent and Novartis’ proposed substitute claims unpatentable as obvious. See Torrent Pharm. Ltd. v. Novartis AG, Nos. IPR2014-00784, IPR2015-00518, 2015 WL 5719630 (PTAB Sept. 24, 2015) (Final Written Decision). Novartis raises a series of challenges to the Board’s analysis of the evidence and ultimate determination of un-patentability. For the reasons stated we affirm.

Background

I.

The ’283 patent relates to a solid pharmaceutical composition suitable for oral administration, comprising a sphingosine-1 phosphate (SIP) receptor agonist and a sugar alcohol, which the patent explains is useful for the treatment of certain autoimmune diseases such as multiple sclerosis. ’283 patent, col. 1, lines 11-14, 33-35; col. 12, lines 19-49. According to the specification, SIP receptor agonists generally exhibit properties that make formulations suitable for oral administration of a solid composition difficult to create. However, “solid compositions comprising a sugar alcohol provide formulations which are particularly well suited to the oral administration of SIP receptor agonists.” See id. at col. 1, lines 36-39. They also “provide a convenient means of systemic administration of SIP receptor agonists, do not suffer from the disadvantages of liquid formulations for injection or oral use, and have good physiocochemical and storage properties.” Id. at col. 1, lines 39-43. In such a composition, the SIP receptor agonist is the active ingredient and the sugar alcohol acts as an excipient — the substance formulated alongside the active ingredient as a diluent, carrier, filler and/or bulking agent for the composition. See id. at col. 9, lines 53-54.

The ’283 patent states that there are multiple known SIP receptor agonists appropriate for use in the claimed invention, set forth in the specification as formulas I-XIII. Id. at col. 1, line 51 to col. 8, line 4. The ’283 patent also states that a “particularly preferred SIP receptor agonist of formula I is FTY720, i.e., 2-amino-2-[2-(4-octylphenyl) ethyl]propane-1,3-diol in free form or in a pharmaceutically acceptable salt form.... ” Id. at col. 8, lines 23-26. FTY720 is also known as fingolimod. The ’283 patent further discloses that the specific sugar alcohol used in the claimed composition “may suitably be mannitol,” because of its non-hygroscopie properties (i.e., it is not likely to absorb moisture, which is beneficial in manufacturing solid oral pills). Id. at col. 9, lines 53-54.

Claims 1 and 19 of the ’283 patent are the only independent claims and are illustrative of the claimed subject matter:

1. A solid pharmaceutical composition suitable for oral administration, comprising:
(a) a SIP receptor agonist which is selected from 2-amino-2-[2-(4-octyl-phenyl)ethyl]propane-1,3-diol, 2-ami-no-2-[4-(3-benzyloxyphenoxy)-2-chlo-rophenyl]propyl-1,3-propane-diol, 2-amino-2-[4-(3-benzyloxyphenylthio)-2-chlorophenyl]propyl-l,3-propane-diol, or 2-amino-2-[4-(3-benzyloxyphenyl-thio)-2-chlorophenyl]-2-ethyl-1,3-pro-pane-diol, and its phosphates or a ■pharmaceutically acceptable salt thereof; and
(b) a sugar alcohol.
19. A solid pharmaceutical composition suitable for oral administration, comprising mannitol and 2-amino-2-[2-(4-octyl-phenyl)ethyl]propane-1,3-diol or a phar-maceutically acceptable salt thereof.

Id. at col. 17, lines 2-11; col. 18, lines 7-16. Thus, claim 1 is directed towards a solid oral composition comprised of the combination of one of a handful of SIP receptor agonists and any sugar alcohol, whereas claim 19 is directed towards the specific combination of fingolimod and mannitol in a solid oral composition.

The dependent claims are directed towards various refinements of the composition, including for example, the addition of a lubricant:

20. A composition according to claim 19, further comprising a lubricant.

Id. at col. 18, lines 11-12. Other claims are directed towards adjusting the respective amount of ingredients:

22. A composition according to claim 19, wherein the compound 2-amino-2-[2-(4-octylphenyl)ethyl]propane-l,3-diol, or a pharmaceutically acceptable salt thereof, is present in an amount of 0.5 to 5% by weight, based on the total weight of the composition.
23. A composition according to claim 19, wherein mannitol is present in an amount of 90 to 99.5% by weight, based on the total weight of the composition.

Id. at col. 18, lines 15-22.

While the application leading to the ’283 patent was pending at the Patent Office, Novartis applied to the U.S. Food and Drug Administration (FDA) for approval to sell a fingolimod-mannitol pill to treat multiple sclerosis under the “Gilenya” brand name. The FDA approved Gilenya for the treatment of multiple sclerosis in 2010.

II.

On May 27, 2014, Torrent filed a petition to institute an inter partes review of claims 1-32 of the ’283 patent. Torrent’s petition presented three separate patentability challenges:

1. claims 1-32 are unpatentable as obvious over the combination of U.S. Patent No. 6,004,565 (Chiba) and Pharmaceutics: The Science of Dosage Form Design (Aulton); and
2. claims 1-4, 7, 8, 19, 22 and 32 are unpatentable as anticipated by U.S. Patent No. 6,277,888 (Sakai); and
3. claims 1-32 are unpatentable as obvious over Chiba and Sakai.

Chiba teaches the use of immunosup-pressive compounds with fingolimod as the preferred species. J.A. 18442. Chiba also teaches that these immunosuppressive compounds are useful for treating “autoimmune diseases such as ... multiple sclerosis,” among other diseases and conditions. J.A. 18443. Chiba goes on to disclose oral administration of fingolimod, including “admix[ing] with [a] carrier, excipient, diluent, and so on and formulation] into ... capsules [or] tablets ... for administering to patients.” J.A. 18444. In discussing the preparation of these capsules and tablets for oral administration of fingolimod, Chiba teaches that “pharmaceutically or physiologically acceptable carriers or excipients for use with the ... compounds noted herein are known in the art or can be readily found by methods and tests known in the art.” J.A. 18446. In other words, Chiba teaches a solid oral composition of fingolimod combined with a generic excipi-ent.

Aulton teaches the use of tablets and capsules to administer drugs orally. J.A. 19041. It specifically teaches that “[t]he successful formulation of a stable and effective solid dosage form depends on the careful selection of the excipients which are added to facilitate administration, promote the consistent release and bioa-vailability of the drug and protect it from degradation.” J.A. 19066-167. Aulton recommends mannitol as a common diluent used in - “[t]ableting by the wet granulation process,” which Aulton describes as “the most widely used method for pharmaceutical materials.” J.A. 19074-77. Aul-ton describes mannitol as “expensive,” but “commonly used” as an excipient in solid oral compositions. J.A. 19077.

Sakai describes a pharmaceutical composition containing fingolimod as an active ingredient. J.A. 18421. More particularly, Sakai discloses that the composition can be formulated into a liquid preparation, or can be a solid lyophilized (freeze-dried) product. J.A. 18421-22. Sakai further discloses that the addition of a saccharide, such as sugar alcohol, to the composition can result in a less irritating resulting liquid solution. J.A. 18421. Sakai discloses a list of eight exemplary saccharides, including mannitol. J.A. 18422. The saccharide, such as manni-tol, can be dissolved in the liquid for dissolution, or alternatively may be contained in the lyophilized product along with the active ingredient. J.A. 18422. Sakai teaches that this liquid pharmaceutical composition can be used for immunosuppression in connection with organ or bone marrow transplantation, autoimmune diseases, or allergic diseases. Id. In short, Sakai teaches the specific combination of fingolimod and mannitol for a liquid formulation.

III.

On December 1, 2014, the Board granted in part Torrent’s petition and instituted trial to review patentability of the challenged claims in IPR2014-00784. Specifically, the Board instituted on the first ground, the combination of Chiba and Aul-ton, but declined to institute on grounds two or three. The Board found that Chiba discloses the use of fingolimod in a solid formulation for oral administration when combined with conventional excipients. It then found that Aulton teaches the use of mannitol as a conventional excipient that a person of skill in the art would have looked to when formulating a solid composition with fíngolimod.

The Board found Sakai to be an improper anticipatory reference because the reference does not describe a solid composition suitable for oral administration. It then rejected the grounds predicated on the combination of Chiba and Sakai for similar reasons, noting that, unlike Aulton, “Sakai does not identify mannitol as a ‘conventional excipient’ in solid pharmaceutical compositions, and Sakai’s stated reasons for using mannitol in liquid pharmaceutical compositions are inapplicable to its potential use in connection with solid pharmaceutical compositions.” J.A. 72.

Apotex and Mylan thereafter filed a separate petition seeking to institute an IPR of claims 1-32 of the ’283 patent based on the already-instituted Chiba/Aulton grounds and requested joinder with the Torrent proceedings. On February 17, 2015, the Board instituted trial in this follow-on proceeding in IPR2015-00518 and joined it with the Torrent proceeding.

After briefing and oral argument, the Board issued its Final Written Decision in the consolidated proceeding. The Board concluded that Chiba and Aulton collectively teach each limitation of claims 1-32 of the ’283 patent. It first addressed claim 19, directed towards the specific combination of fíngolimod and mannitol. The Board found that Chiba and Aulton together strongly suggested the claimed two-ingredient combination:

First, Chiba teaches that a person of ordinary skill in the art would have been able to identify or easily determine excipients that would have been compatible with fíngolimod ... (“pharmaceuti-cally or physiologically acceptable carriers or excipients for use with the ... compounds noted herein are known in the art or can be readily found by methods and tests known in the art”). Second, Aulton teaches that mannitol is not only a known diluent for direct compression manufacturing, but also commonly used in wet granulation, which Aulton teaches is “the most widely used method for pharmaceutical materials.” ... This combination of teachings already strongly suggests that mannitol likely would have been a target of investigation for a person of ordinary skill in the art interested in finding an excipient compatible with fíngolimod....

Final Written Decision, 2015 WL 5719630, at *8. After finding that the two references themselves strongly suggested the claimed invention, the Board expressly found “additional evidence of the reason to combine fingolimod and mannitol.” Id. First, the Board noted that Sakai “directly instructs that the two ingredients should be combined.” Id. Although Novartis argued in its briefs below that Sakai’s teaching is narrowly limited to liquid-phase pharmaceutical compositions, as opposed to the claimed solid oral dosage forms, the Board observed that Novartis’ own expert, Dr. Stephen Byrn, had written an article describing how “solution studies can be very helpful” in understanding drug degradations in the solid state. Id. Despite Novartis’ attempt to minimize the article’s meaning, the Board concluded that “a suggestion to combine ingredients in the liquid phase would have been relevant to the determination of a person of ordinary skill in the art to combine the same ingredients in the solid phase.” Id.

Acknowledging that it had denied instituting the IPR based on Sakai alone (per § 102) or in combination with Chiba (per § 103), the Board distinguished its final decision’s usage of Sakai, explaining that its final decision simply relied on Sakai as a background reference that offered additional motivation evidence to combine Chiba with Aulton. The Board explained that even though Sakai did not “teach that mannitol is a conventional excipient for use in solid pharmaceutical compositions,” id., the record evidence relating to Dr. Byrn’s article, which was debated by the parties, supported a finding that “Sakai’s teaching would have been relevant to the decision on which excipient to use in formulating a solid oral dosage form of fingolimod.” Id.

The Board went on to find that several additional background references in the proceeding demonstrate that mannitol provides advantages when used as a diluent in tableting, further supporting a reason to combine. The Board cdncluded its motivation to combine analysis:

Given (1) the knowledge in the art that mannitol provided advantages in formulating tablets generally, (2) Chiba’s teaching that a person of ordinary skill in the art would have been able to identify or easily determine excipients that would have been compatible with fingoli-mod, (3) Aulton’s teaching that mannitol was a diluent commonly used in the most common form of pharmaceutical manufacture, (4) Sakai’s teaching that mannitol and fingolimod should be combined in the liquid phase, and (5) Dr. Byrn’s statement that liquid-phase compatibility was relevant to the prediction of solid-phase compatibility, we conclude that Petitioners have shown a reason to combine the teachings of Chiba and Aul-ton.

Id. at *9.

The Board next turned to the objective indicia of nonobviousness. First, it found that independent claims 1 and 19 were “not commensurate in scope” with the purported unexpected result of fingolimod’s low concentration stability when combined with mannitol, because the independent claims are “not limited to any particular dose or dose range of fingolimod.” Id. at *10. Therefore, the Board concluded, “even if the stability of the mannitol-fingolimod combination at low doses was unexpected, it is insufficient to support a legally significant finding of unexpected results.” Id. at *11. The Board also rejected Novartis’ long-felt but unsolved need, industry praise, and commercial success arguments because all of Novartis’ proffered evidence was directed solely toward the fact that Gilenya was a solid oral multiple sclerosis treatment, which was already known in the prior art.

The Board then analyzed the dependent claims in turn. Relevant to this appeal, the Board turned to dependent claims 8, 10, 22, and 23, and proposed amended claims 40, 42, 54, and 55, directed towards concentrations with low percentages of fingol-imod by weight. The Board found that “Petitioners provide evidence that the selection of the relative amounts of the constituents of the claimed formulation is the result of routine optimization.” Id. at *16. It further noted, “[w]e have not been directed to any evidence of record contradicting this evidence, so we find that a person of ordinary skill in the art familiar with Chiba and Aulton would have been able and motivated to optimize the amount of fingolimod ...” Id.

In conclusion, the Board held every claim unpatentable as obvious and denied Novartis’ motion to amend for essentially the same reasons it rejected the original claims. Appellants timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

Discussion

We review Board decisions using the standard set forth in the Administrative Procedure Act (APA), 5 U.S.C. § 706. In re Sullivan, 362 F.3d 1324, 1326 (Fed. Cir. 2004) (citing Dickinson v. Zurko, 527 U.S. 150, 154, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999)); see also Belden Inc. v. Berk- Tek LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015). Under the APA, we must “hold unlawful and set aside agency action ... not in accordance with law [or] ... without observance of procedure required by law.” 5 U.S.C. § 706.

We review the Board’s legal conclusions de novo but review for substantial evidence any underlying factual determinations. See Nike, Inc. v. Adidas AG, 812 F.3d 1326, 1332 (Fed. Cir. 2016); In re Giannelli, 739 F.3d 1375, 1378-79 (Fed. Cir. 2014). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938); see In re Applied Materials, Inc., 692 F.3d 1289, 1294 (Fed. Cir. 2012).

On appeal, Novartis first contends that the Board violated the APA when it relied on Sakai in the Final Written Decision without affording Novartis proper notice and a chance to be heard. Novartis goes on to argue that the Board also erred on the merits, specifically in its analysis of the motivation to combine evidence and in its treatment of the alleged objective indicia of nonobviousness.

I. APA Due Process

We first turn to Novartis’ argument that the Board violated the requirements of notice and an opportunity to respond found in the APA when it used the Sakai reference as part of its motivation to combine analysis in the Final Written Decision. According to Novartis, the Board ruled Sakai entirely out of the case in the Institution Decision, and on that basis, denied institution of the two proposed grounds based on Sakai. Novartis contends that it relied on that ruling and consequently submitted a “vastly different” record than it would have if it had known Sakai was still a live issue.

In a formal adjudication, such as an IPR, the APA imposes certain procedural requirements on the agency. The Patent and Trademark Office, including the Board, must provide the patent owner with timely notice of “the matters of fact and law asserted,” and an opportunity to submit facts and argument. 5 U.S.C. §§ 554(b)-(c), 557(c); Dell Inc. v. Acceleron, LLC, 818 F.3d 1293, 1301 (Fed. Cir. 2016). The notice and opportunity to be heard provisions of the APA have been applied “to mean that ‘an agency may not change theories in midstream without giving respondents reasonable notice of the change’ and ‘the opportunity to present argument under the new theory.’ ” Belden, 805 F.3d at 1080 (quoting Rodale Press, Inc. v. FTC, 407 F.2d 1252, 1256-57 (D.C. Cir. 1968)). In this case we conclude that the relevant APA provisions were satisfied.

A.

We first disagree with Novartis that the Board ruled Sakai out of the case entirely in the Institution Decision. In the Institution Decision, the Board declined to read Sakai as an anticipatory reference or primary obviousness reference because Sakai does not disclose “mannitol as a ‘conventional excipient’ in solid pharmaceutical compositions, and Sakai’s stated reasons for using mannitol in liquid pharmaceutical compositions are inapplicable to its potential use in connection with solid pharmaceutical compositions.” J.A. 72. In other words, although Sakai discloses the combination of fingolimod and mannitol, it does not expressly disclose the combination in a solid pharmaceutical composition nor does its teaching of a liquid composition necessarily translate to a solid oral composition.

This conclusion, however, is not contrary to the Board’s discussion of Sakai in the Final Written Decision that Sakai’s teachings would have nevertheless been relevant to one of skill in the art in deciding which excipients to use in formulating a solid oral dosage form of fíngolimod. Having already found that Chiba and Aulton-strongly suggest the combination of fíngol-imod and mannitol in a solid oral composition, the Board found that Sakai merely reinforced its finding that the person of ordinary skill in the art would have expected mannitol to be compatible with fíngoli-mod because Sakai discloses a stable combination of these two ingredients suitable for long-term preservation. The Board’s discussion of Sakai in the Final Written Decision was not inconsistent with its review of Sakai in the Institution Decision.

B.

We also reject as unfounded Novartis’ complaints of “surprise” and contention that, following the Institution Decision, the parties “paid Sakai scant attention in subsequent proceedings.” The parties debated Sakai at length throughout the proceeding and in the same context that it was discussed by the Board in the Final Written Decision.

As an initial matter, we note that in addition to asserting Sakai as a primary reference, Torrent’s petition also argued that several references, including Sakai, further support the motivation to combine the teachings of Chiba and Aulton. Specifically, Torrent argued in connection with the combination of Chiba and Aulton that “Sakai (Ex. 1005) reinforced the expectation to the ordinarily-skilled artisan that mannitol would have been compatible with FTY720 [fíngolimod] because Sakai discloses pharmaceutical injectable compositions containing FTY720 [fíngolimod] and mannitol in solution, as well as lyophilized product meant for long-term preservation in' vials containing FTY720 [fíngolimod] and mannitol.” J.A. 6832. And in support of their petition, Apotex and Mylan also explained that Sakai would direct the person of ordinary skill in the art to the combined teachings of Chiba with Aulton. It reiterated the argument raised in the Torrent petition that' the ordinarily skilled artisan would have naturally considered mannitol because of its known compatibility with fíngolimod, again citing Sakai’s disclosure of a stable composition comprised of these two ingredients.

Following institution of the Apotex/My-lan proceeding and joinder with the' Torrent proceeding, the relevance of Sakai’s compatibility-disclosure to support a motivation to combine Chiba and Aulton was an ongoing, debated issue that Novartis addressed directly, on multiple occasions. In its Patent Owner’s Response, Novartis specifically argued that Petitioners’ reliance on Sakai’s stability-disclosure in connection with the motivation to combine inquiry lacked merit because Sakai is relevant only to liquid compositions. Petitioners continued to press the issue in their Reply, contending that Sakai “would have provided a [person of skill in the art] with a reasonable expectation that mannitol is compatible with fíngolimod.” J.A. 7782.

Furthermore, both Petitioners’ expert and Novartis’ expert went into significant detail in their post-institution declarations discussing Sakai and its applicability to the motivation to combine inquiry. Novartis’ counsel then questioned Petitioners’ expert at length about Sakai. And Novartis’ submitted Observations on Cross Examination repeatedly explained why Sakai did not support Petitioners’ motivation to combine argument. At the hearing, both parties submitted demonstrative slides dedicated to Sakai and spent considerable attention discussing Sakai’s relevance as a background reference supporting the motivation to utilize mannitol with fíngolimod in an oral formulation. Based on this record, it is quite clear that Novartis had more than sufficient notice and opportunity to be heard on Sakai’s potential relevance, and in fact actively and repeatedly attempted to distinguish Sakai to defeat the very argument relied on by the Board in the Final Written Decision.

In sum, we reject Novartis’ contention to this court that it believed Sakai was not at issue in the proceeding. For this reason we reject Novartis’ APA challenge.

C.

Finding no APA violation for the reasons discussed above, we nevertheless also reject Novartis’ characterization of Sakai as the “missing link” in the Board’s obviousness analysis. Contrary to Novartis’ contention, Sakai was discussed by the Board as one of several independent grounds supporting the motivation to combine fingolimod and mannitol in a solid oral composition. In finding a motivation to combine, the Board explained that the teachings of Chiba and Aulton alone “already strongly suggests that mannitol likely would have been a target of investigation for a person of ordinary skill in the art interested in finding an excipient compatible with fingolimod.” Final Written Decision, 2015 WL 5719630, at *8.

Nevertheless, the Board continued to bolster its analysis with “additional evidence of the reason to combine fingolimod and mannitol.” Id. And Sakai’s teaching to combine fingolimod and mannitol was just one of those additional reasons. The Board further explained that “[i]n addition to the direct teaching in Sakai that mannitol and fingolimod should be combined, several documents that would have been known to a person of ordinary skill in the art teach that mannitol provides advantages when used as a diluent in tableting.” Id. at *9. The Board went on to explain that these references — all unchallenged on appeal— describe known advantages of using man-nitol as an excipient in solid oral compositions that “provide a strong reason to combine Chiba’s teaching of a solid oral dosage form of fingolimod and Aulton’s teaching of mannitol as an excipient for making solid oral dosage forms.” Id. These additional references are also substantial evidence supporting the Board’s motivation to combine conclusion, independent of Sakai. This is not a case where Sakai provided the linchpin of the Board’s analysis, as Novartis contends.

For all these reasons, we find no violation of the APA with respect to the Board’s discussion of Sakai in the Final Written Decision.

II. Obviousness

We turn to Novartis’ remaining challenges to the Board’s obviousness analysis.

Obviousness is a mixed question of fact and law. The Board’s ultimate conclusion that the claims are not obvious is a legal determination subject to de novo review, however, the subsidiary factual findings are reviewed for substantial evidence. In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000). Motivation to combine is one of those underlying factual issues. Id. (“The presence or absence of a motivation to combine references in an obviousness determination is a pure question of fact.”). Whether objective indicia support a finding of nonobviousness is also a factual question. Merck & Cie v. Gnosis S.P.A., 808 F.3d 829, 833 (Fed. Cir. 2015).

A. Motivation to Combine

Novartis argues that the Board further erred in its motivation to combine analysis because it failed to read the prior art as a whole and overlooked critical evidence of mannitol’s known disadvantages as an excipient for solid compositions. In particular, Novartis argues that it pointed out mannitol’s negative properties, including difficulty to manufacture, the existence of impurities, and expense. Because the Board did not expressly state that it was weighing all of these negatives against mannitol’s positives, Novartis contends that the Board’s motivation to combine analysis was legally flawed. In support of its contention, Novartis directs the court to Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157 (Fed. Cir. 2006). In Medichem, this court explained that “[w]here the prior art contains ‘apparently conflicting’ teachings (i.e., where some references teach the combination and others teach away from it) each reference must be considered ‘for its power to suggest solutions to an artisan of ordinary skill ... considering] the degree to which one reference might accurately discredit another.’ ” Id. at 1165 (quoting In re Young, 927 F.2d 588, 591 (Fed. Cir. 1991)).

Contrary to Novartis’ contention, the record reflects that the Board considered Novartis’ arguments regarding motivation to combine, weighed them against the competing evidence and argument, and concluded that despite Novartis’ contentions, one of skill in the art would have been motivated to combine fingolimod with man-nitol in a solid composition. Indeed, the Board expressly discussed one of manni-tol’s negative properties in the Final Written Decision — its expense — but noted that, despite this potentially discouraging characteristic, it was still “commonly used.” Final Written Decision, 2015 WL 5719630, at *5. And it went on to cite the portion of the Patent Owner’s Response discussing the arguments Novartis highlights on appeal when rejecting Novartis’ teaching-away argument.

Moreover, the Board’s consideration of mannitol’s negative properties in the Final Written Decision was at least commensurate with Novartis’ presentation of those issues to the Board in its Patent Owner Response. In a lengthy brief, Novartis’ discussion was relegated to one passing, unsupported sentence, stating that “[w]hile mannitol has some positive properties, it also has negative ones, including expense, poor machinability and possible impurities.” J.A. 7354. Novartis did not direct the Board to the expert declarations it now highlights on appeal, nor did it direct the Board to any record evidence at all. And there is no indication in the record that Novartis elsewhere meaningfully advanced these suggested negatives or developed them in such a fashion as to necessarily overcome the numerous advantages of .mannitol identified by Petitioners and discussed in the Final Written Decision. Thus, we are not persuaded that Novartis presented its arguments against the use of mannitol in such a way that it would be appropriate to find fault in the Board’s arguably limited treatment of those arguments in the Final Written Decision.

This court’s discussion in Medichem does not change our conclusion. Although the court there stated that prior art must be considered as a whole and the disadvantages of a reference must be considered in addition to the benefits, 437 F.3d at 1165, there is no requirement that the Board expressly discuss each and every negative and positive piece of evidence lurking in the record to evaluate a cursory argument. In addition, this court has said on multiple occasions that failure to explicitly discuss every issue or every piece of evidence does not alone establish that the tribunal did not consider it. See, e.g., Carolina Tobacco Co. v. Bureau of Customs & Border Prot., 402 F.3d 1345, 1350 (Fed. Cir. 2005) (“[T]he failure of Customs to explicitly discuss the six factors when it initially increased Carolina’s bond does not establish that it did not consider them.”); Lab. Corp. of Am. Holdings v. Chiron Corp., 384 F.3d 1326, 1332 (Fed. Cir. 2004) (stating that a district court’s failure to discuss an issue does not necessarily establish that the court did not consider it); Charles G. Williams Const., Inc. v. White, 326 F.3d 1376, 1380 (Fed. Cir. 2003) (“The Board’s failure to discuss the evidence upon which Williams relies does not mean that it did not consider it”). The Board is “not require[d] ... to address every argument raised by a party or explain every possible reason supporting its conclusion.” Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1322 (Fed. Cir. 2016). Here, given that the Board cited to the relevant pages of Novartis’ Patent Owner Response, we find no reason to assume the Board failed to consider mannitol’s cited negatives simply because they were not recited at length in the Board’s Final Written Decision.

Having dispatched Novartis’ numerous procedural arguments, we ask finally whether substantial evidence supports the Board’s finding on the motivation to combine Chiba and Aulton. Here, we conclude that substantial evidence supports the Board’s finding that, despite mannitol’s potentially negative characteristics, it was nevertheless a valid consideration as an excipient for solid oral pharmaceuticals and a person of skill in the art would have been motivated to combine fin-golimod and mannitol in the manner claimed by the ’283 patent. Indeed, the Board cites to multiple pieces of evidence establishing mannitol as one of a handful of excipients used in solid oral compositions and its primacy as a non-hygroscopie and compressible diluent which makes it particularly valuable in tableting.

We, therefore, find no legal error in the Board’s treatment of the motivation to combine evidence nor do we find a lack of substantial evidence supporting its conclusion.

B. Objective Indicia of Nonboviousness

Novartis next argues that • the Board erred in its assessment of the various objective indicia of nonobviousness. We address each argument in turn.

i. Unexpected Results

According to Novartis, the Board erred when it grouped several dependent claims with their independent claims when considering Novartis’ unexpected results evidence. Novartis argues that it presented persuasive evidence to the Board that the combination of fingolimod and manni-tol solved the problem of fingolimod’s unexpected low dose instability. The Board rejected that argument with respect to independent claims 1 and 19 because those claims contain no dosage limitation, and therefore, the unexpected results evidence was not commensurate in scope with the claims. Novartis does not appeal that Board finding as it relates to claims 1 and 19. Instead, Novartis argues that the Board should have reassessed the unexpected results argument when it found unpatentable dependent claims 8, 10, 22, and 23, and proposed amended claims 40, 42, 54, and 55. In Novartis’ view, these claims recite the “low dosage” limitation lacking in claims 1 and 19.

At the outset, we note that the argument raised to the Board below was quite different than Novartis’ characterization of that argument on appeal. In appeals from the Board, “we have before us a comprehensive record that contains the arguments and evidence presented by the parties and our review of the Board’s decision is confined to the four corners of that record.” In re Watts, 354 F.3d 1362, 1367 (Fed. Cir. 2004) (internal quotation marks and citation omitted). Thus, we must first determine whether Novartis preserved this argument for appeal. While the court “retains case-by-case discretion over whether to apply waiver,” Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1251 (Fed. Cir. 2005) (citations omitted), we have held that a party waives an argument that it “failed to present to the Board” because it deprives the court of “the benefit of the Board’s informed judgment,” Watts, 354 F.3d at 1367-68. We turn our attention to the unexpected results argument Novartis actually presented to the Board.

The undeniable focus of Novartis’ arguments throughout the proceeding, including its Patent Owner’s Response, was the patentability of the combination of fingoli-mod and mannitol, as broadly recited in claim 19. The Argument section of the Patent Owner’s Response alerts the Board in the very first paragraph that Novartis’ arguments are directed to claim 19. What follows in the Patent Owners’ Response is Novartis’ explanation for why there was no ex ante reason to combine fingolimod with mannitol or to reasonably expect success in the combination — untethered from any specific dosage or concentration limitation and with no discussion of any dependent claims.

Novartis’ objective indicia argument under the heading “Objective Indicia Prove the Fingolimod-Mannitol Invention” is similarly generic. Novartis there contends that the objective indicia “overwhelmingly prove the patentability of the fingolimod-mannitol formula.” J.A. 7362. Given the reference to the fingolimod-mannitol formula only and the failure to identify any-specific claim, this section is simply a continuation of Novartis’ defense of claim 19. And turning to the unexpected results section in particular, we see -the entirety of Novartis’ argument in a few short sentences:

First, mannitol unexpectedly is stable with fingolimod throughout the full dosage range. Excipient stability normally does not vary with dose proportions. Drs. Kent and Kibbe each confirmed that fact in their depositions. [Citing deposition transcripts]. So do Dr. Byrn, Dr. Pudipeddi, and Mr. Oomura. [Citing declarations]. Petitioners do not address this unexpected result at all.

J.A. 7363 (emphasis added). Novartis did not identify the dependent claims at issue now or discuss specific dosages or concentrations at all. Nor do any of the supporting citations. The only fair characterization of Novartis’ argument is that the combination of fíngolimod and mannitol was unexpectedly stable irrespective of concentration, i.e., “throughout the dosage range.” Id. Novartis’ Motion to Amend likewise fails to present any separate argument for proposed amended claims 40, 42, 54, and 55.

We thus find no fault in the Board’s observation that Novartis offered no separate argument with respect to dependent claims 8, 10, 22, and 23, or proposed amended claims 40, 42, 54, and 55. The sole focus of the proceeding, including Novartis’ unexpected results argument, was on claim 19. Novartis even conceded at oral argument that the focus of its unexpected results argument was that fíngoli-mod was unexpectedly stable across the entire dosage range. Oral Arg. at 48:40— 48:49 and 53:00-53:08, available at http:// oralarguments.cafc.uscourts.gov/default. aspx?fl=2016-1352.mp3. We find no evidence that Novartis distinctly argued an unexpected result specific to the dependent claims Novartis now raises on appeal. That argument is therefore waived.

ii. Nexus

Novartis next argues that the Board erred as a matter of law in its analysis of the “nexus” requirement with respect to the objective evidence of nonob-viousness. Before the Board, Novartis contended that its drug, Gilenya, enjoyed commercial success, industry praise, and met a long-felt but previously unsolved need, due to Gilenya being the first commercially available solid oral treatment for multiple sclerosis. On appeal, Novartis complains that the Board wrongly discounted this evidence in light of the disclosure of solid oral multiple' sclerosis drug formulas in prior art references, which, in the Board’s view, precluded Novartis’ argued for basis for a nexus between the ’283 patent’s invention and the objective indi-cia — even though none of those drugs were available to the market until after the ’283 patent was filed. Distilled down, Novartis argues that, as a matter of law, a feature that is known in the art but not actually available to the market — i.e., in commerce — cannot be used to disprove Novartis’ attempts to establish a nexus based on that claimed feature.

We disagree. None of the cases cited by Novartis, or any that we are aware of, stand for such a sweeping proposition. For objective indicia evidence to be accorded substantial weight, we require that a nexus must exist “between the evidence and the merits of the claimed invention.” Wyers v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010). “Where the offered secondary consideration actually results from something other than what is -both claimed and novel in the claim, there is no nexus to the merits of the claimed invention.” In re Kao, 639 F.3d 1057, 1068 (Fed. Cir. 2011); see also Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358, 1369 (Fed. Cir. 2011) (“If commercial success is due to an element in the prior art, no nexus exists.”); Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1312 (2006) (“[I]f the feature that creates the commercial success was known in the prior art, the success is not pertinent.”).

In evaluating whether the requisite nexus exists, the identified objective indicia must be directed to what was not known in the prior art — including patents and publications — which may well be the novel combination or arrangement of known individual elements. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418-19, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007); Veritas Techs. LLC v. Veeam Software Corp., 835 F.3d 1406, 1414-15 (Fed. Cir. 2016). Our opinion in Asyst Technologies, Inc. v. Emtrak, Inc., 544 F.3d 1310 (Fed. Cir. 2008), is instructive. In Asyst, the trial court concluded that patent owner Asyst failed to link the objective indicia to the claimed invention because the proffered evidence lacked a nexus to any feature of the invention’s commercial embodiments that was not already disclosed in a prior art patent — the Hesser patent. 544 F.3d at 1316. The court found “even though commercial embodiments of [As-yst’s] ’421 invention may have enjoyed commercial success, Asyst’s failure to link that commercial success to the features of its invention that were not disclosed in [the] Hesser [patent] undermines the probative force of the evidence pertaining to the success of Asyst’s [ ] products.” Id. We explained, “[w]hile the evidence shows that the overall system drew, praise as a solution to a felt need, there was no evidence that the success of the commercial embodiment of the ’421 patent was attributable to the substitution of a multiplexer for a bus, which was the only material difference between [the] Hesser [patent] and the patented invention.” Id.

Here, Novartis’ nexus argument for its objective indicia evidence is based solely on a single premise — Gilenya being the first eommercially-available solid oral multiple sclerosis treatment. The treatment of multiple sclerosis with a solid oral composition, however, was indisputably known in the prior art. The Board found evidence that Chiba itself suggested treating multiple sclerosis using a solid oral form of fingolimod. And at least two other solid oral multiple sclerosis treatments were disclosed in the prior art literature before the ’283 patents priority date. The fact that Gilenya was the first to receive FDA approval for commercial marketing does not overcome the fact that solid multiple sclerosis compositions were already known. Thus, we agree with the Board that Novartis’ proffered evidence is not probative of the nonobviousness inquiry.

Conclusion

For the foregoing reasons, we affirm the Board’s decision. We have considered all of Novartis’ remaining arguments but conclude that they are without merit.

AFFIRMED

Costs

No costs.

      . Citations to “J.A. _" refer to the Joint Appendix filed by the parties.

      . Indeed, had Novartis believed the Board eliminated Sakai from the proceeding, it had various procedural mechanisms at its disposal to respond to any perceived impropriety with Petitioners’ continued reliance on the reference. In particular, Novartis could have moved to exclude the Sakai reference. See Genzyme Therapeutic Prods. v. Biomarin Pharm. Inc., 825 F.3d 1360, 1368 (Fed. Cir. 2016). We find meritless Novartis' argument that it did in fact move to exclude Sakai from the proceeding. See Oral Arg. at 53:30-53:51: available at http://oralarguments.cafc. uscourts.gov/default.aspx?fl=2016-1352.mp3. Although not provided in the Joint Appendix, Novartis' counsel invited the court to review its motion to exclude. That invitation, unfortunately, led the court on a road to nowhere. In its motion, Novartis moved to exclude over fifty exhibits, including Sakai, all identified by exhibit number only and listed in one long string cite, based on one conclusory sentence: "Petitioners rely on numerous exhibits that are incomplete and/or irrelevant to the sole issue for review identified by the Board — i.e., (non)obviousness of the '283 Patent in light of Chiba over Aulton).” Patent Owner's Motion to Exclude at 20, Paper No. 73. This superficial treatment amounts to little more than a request that the Board peruse the cited evidence and piece together a coherent argument on Novartis’ behalf. It is far from sufficient to raise a meaningful challenge to any of the several dozen exhibits, let alone to sensitize the Board to the complained-of use of Sakai in particular.

      . Proposed amended claims 40, 42, 54, and 55 are identical to, and would have replaced, original claims 8, 10, 22, and 23, respectively.

      . This is not a case where Novartis argues that the required nexus may be presumed and the presumption was disregarded by the Board. Moreover, any presumption of nexus is nevertheless rebuttable by evidence that the proffered objective evidence was due to extraneous factors other than the merits of the claimed invention. See, e.g., WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1329 (Fed. Cir. 2016).

      . Novartis raises an additional challenge to the Board’s analysis of Novartis’ commercial ' success evidence in particular. Having concluded that Novartis failed to establish a sufficient nexus between its proffered commercial success and the claims, the Board continued, “setting aside the issue of whether commercial success of Gilenya should be probative of nonobviousness, we are not convinced that Patent Owners have carried their threshold burden to show 'significant sales in a relevant market.’ ” Final Written Decision, 2015 WL 5719630, at *14. The Board then proceeded to dismiss Novartis' commercial success argument due to its concerns with Novartis’ assessment of the relevant market and the completeness of its market share data. Because we agree with the Board that Novartis failed to establish a nexus between the claims and all purported evidence of nonobviousness— including commercial success. — we need not and do not reach the Board’s additional grounds for rejecting this evidence.


source: Caselaw Access Project

author: COLLOTON, Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jose Luis ROMERO-ORBE, also known as Jose Ramon Armenta-Valdez, Defendant-Appellant.
    No. 15-3992
    United States Court of Appeals, Eighth Circuit.
    Submitted: October 19, 2016
    Filed: April 17, 2017
    Counsel who represented the appellant was Daniel L. Gerdts of Minneapolis, MN.
    Counsel who represented the appellee was Ryan R. Wood, AUSA, of Minneapolis, MN.
    Before LOKEN, SMITH, and COLLOTON, Circuit Judges.

      . The Honorable Lavenski R. Smith became Chief Judge of the United States Court of Appeals for the Eighth Circuit on March 11, 2017.

   COLLOTON, Circuit Judge.

Jose Romero-Orbe pleaded guilty to illegal reentry to the United States after a previous removal and conviction for commission of an aggravated felony. See 8 U.S.C. §§ 1326(a) and (b)(2). The district court sentenced him to 36 months’ imprisonment.

Romero-Orbe appeals, arguing that the district court committed procedural error in calculating the advisory guideline range. Under the guidelines in effect at the time of sentencing, the defendant’s offense level was enhanced by 16 levels if he previously was deported after a conviction for a felony that was a “crime of violence.” USSG § 2L1.2(b)(1)(A) (2015). “Crime of violence” under the guideline includes any offense under state law that “has as an element the use, attempted use, or threatened use of physical force against the person of another.” Id., comment. (n.1(B)(iii)).

Romero-Orbe contends that the district court mistakenly concluded that his prior conviction for domestic assault under Minn. Stat. § 609.2242, subdivision 4 was a crime of violence that triggered the increase. Subdivision 4 provides that a violation of subdivision 1 of the statute constitutes a felony, as opposed to a misdemeanor, if it is committed within ten years of the first of any two or more prior domestic violence-related convictions. Subdivision 1, in turn, explains that a domestic assault occurs when a person, against a family or household member, “(1) commits an act with intent to cause fear in another of immediate bodily harm or death; or (2) intentionally inflicts or attempts to inflict bodily harm upon another.” § 609.2242, subd. 1 (2013).

The district court ruled that Romero-Orbe’s conviction under § 609.2242, subdivision 4 qualified as a “crime of violence,” because the offense satisfied the “force” clause of the definition in the guideline. Romero-Orbe disputes this conclusion. He maintains that under subdivision 1(1), a person can be convicted based on an intent to cause fear, without “the use, attempted use, or threatened use of physical force.” Therefore, he argues, the Minnesota statute is not categorically a crime of violence, and the district court erred by increasing his offense level.

This case is controlled by the reasoning of United States v. Schaffer, 818 F.3d 796 (8th Cir. 2016). In Schaffer, this court determined that Minn. Stat. § 609.2242, subdivision 1(1) qualifies as a “violent felony” for purposes of the Armed Career Criminal Act, 18 U.S.C. § 924(e). The court reasoned that an act undertaken with intent to cause fear in another of immediate bodily harm or death necessarily involves a threatened use of physical force against the person of another. 818 F.3d at 798. Although Schaffer applied § 924(e) rather than the sentencing guideline at issue here, the applicable definitions are identical, and we see no basis for a distinction. Accordingly, the district court correctly concluded that Romero-Orbe’s conviction under Minn. Stat. § 609.2242, subdivision 4 was for a crime of violence under USSG § 2L1.2. There was no procedural error.

The judgment of the district court is affirmed.

      . The Honorable Ann D. Montgomery, United States District Judge for the District of Minnesota.


author: LUCERO, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Gregory D. JORDAN, Defendant-Appellant.
    No. 16-3084
    United States Court of Appeals, Tenth Circuit.
    FILED April 18, 2017

      Daniel T. Hansmeier, Appellate Chief (Melody Brannon, Federal Public Defender, and Carl Folsom, III, Assistant Federal Public Defender, with him on the briefs), Office of the Federal Public Defender, Topeka, Kansas, for Defendant Appellant.
    Jared S. Maag, Assistant United States Attorney (Thomas E. Beall, Acting United States Attorney, with him on the brief), Topeka, Kansas, for Plaintiff-Appellee.
    Before LUCERO and BACHARACH, Circuit Judges.

       The Honorable Neil Gorsuch heard oral argument but did not participate in this Opinion. The practice of this court permits the remaining judges to act as a quorum in resolving the appeal. See 28 U.S.C. § 46(d); see also United States v. Wiles, 106 F.3d 1516, 1516 n* (10th Cir. 1997) (noting this court allows remaining judges to act as a quorum to resolve an appeal); Murray v. Nat'l Broad. Co., 35 F.3d 45, 48 (2d Cir. 1994) (remaining two judges of original three-judge panel may decide petition for rehearing without third judge).

   LUCERO, Circuit Judge.

Under 18 U.S.C. § 3582(c)(2), a district court may reduce a defendant’s term of imprisonment if it was “based on a sentencing range that has subsequently been lowered by the Sentencing Commission.” This appeal requires us to address the “based on” requirement of § 3582(c)(2) in the context of a Fed. R. Crim. P. 11(c)(1)(C) plea agreement.

Defendant Gregory Jordan was sentenced to 168 months’ imprisonment pursuant to a Rule 11(c)(1)(C) agreement that proposed a base offense level of 31 and a Guidelines range of 135 to 168 months. The district court accepted the plea agreement, despite a discrepancy between the parties’ agreed-upon sentencing range and the range calculated by the district court. After both ranges were subsequently lowered by the Sentencing Commission, Jordan moved for a reduced sentence under § 3582(c)(2). The district court denied relief, concluding that Jordan’s sentence was not “based on” the Guidelines and he was thus ineligible for a sentence reduction. We hold, to the contrary, that Jordan’s sentence was “based on” the Guidelines for purposes of § 3582(c)(2). Accordingly, he is eligible for relief. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse and remand.

I

In 2009, Jordan entered a Fed. R. Crim. P. 11(c)(1)(C) plea agreement, pleading guilty to one count of conspiracy to possess with the intent to distribute five kilograms or more of cocaine, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A)(ii), and 846, and 18 U.S.C. § 2. The agreement proposed a Guidelines offense level of 31, for a sentencing range of 135 to 168 months’ imprisonment. The agreement also stated that the parties were “of the belief that the proposed sentencing range [did] not offend the now advisory sentencing guidelines,” and that “because [the] proposed sentence [was] sought pursuant to Fed. R. Crim. P. 11(c)(1)(C), the parties [were] not requesting imposition of an advisory guideline sentence.”

At a change of plea hearing, the prosecutor affirmed that the parties’ agreed-upon offense level “fairly and accurately represented]” Jordan’s particular offense, “pursuant to a plea with acceptance of responsibility coming into play.” She further indicated her belief that Jordan had a criminal history category of III, resulting in a Guidelines range of 135 to 168 months. The court accepted Jordan’s guilty plea, but reserved judgment on the plea agreement pending review of the presentence investigation report (“PSR”).

In the PSR, there was a notable change from the plea agreement: it assessed a total offense level of 33, for a sentencing range of 168 to 210 months’ imprisonment. This range was calculated based on a criminal history category of III and a finding that Jordan had conspired to possess and distribute fifteen kilograms of cocaine, resulting in a base offense level of 34. The PSR then added a two-point enhancement for possession of firearms and a three-level reduction for acceptance of responsibility. Neither party objected to the PSR.

At sentencing, the district court adopted the PSR in full, but also accepted the parties’ plea agreement. A “small disparity” was acknowledged by the court between the sentencing range proposed in the agreement “and what the guidelines strictly applied would allow.” The court then imposed a sentence of 168 months’ imprisonment, reasoning that such a term was at “the low end of what the guideline range would otherwise have been,” which it described as “an important factor.” It also noted that the plea agreement and PSR differed as to the quantity of cocaine used in the calculations, and it agreed with the PSR’s assessment of fifteen kilograms rather than the agreement’s apparent assessment of ten kilograms. Final judgment was entered in October 2009.

On November 1, 2014, Guidelines Amendments 782 and 788 went into effect, retroactively lowering the base offense levels for certain drug quantities. The base offense level for fifteen kilograms of cocaine was reduced from 34 to 32, and the base offense level for ten kilograms of cocaine was reduced from 32 to 30. See U.S.S.G. § 2D1.1(c)(4) & (5) (Drug Quantity Table) (2014). Jordan subsequently filed a motion for a sentence reduction under 18 U.S.C. § 3582(c)(2), requesting a new sentence of 135 months. That motion was dismissed for lack of jurisdiction on the ground that Jordan was ineligible for a sentence reduction because his sentence was “based on” the parties’ plea agreement and not the Sentencing Guidelines. Jordan timely appealed.

II

We review de novo the district court’s dismissal for lack of jurisdiction under § 3582(c). United States v. Graham, 704 F.3d 1275, 1277 (10th Cir. 2013). Federal courts generally lack the authority to “modify a term of imprisonment once it has been imposed.” § 3582(c). However, § 3582(c)(2) permits a district court to reduce a defendant’s sentence if it was “based on a sentencing range that has subsequently been lowered by the Sentencing Commission” and such a reduction would be “consistent with applicable policy statements issued by the Sentencing Commission.” Under those policy statements, a court may reduce a defendant’s sentence if “the guideline range applicable to that defendant has subsequently been lowered as a result of an amendment to the Guidelines Manual.” U.S.S.G. § 1B1.10(a)(1).

Our first step in determining whether Jordan is eligible for a sentence reduction is considering whether his sentence was “based on” a subsequently lowered Guidelines range. Because Jordan was sentenced under a Rule 11(c)(1)(C) plea agreement, our analysis is directed by the Supreme Court’s fragmented decision in Freeman v. United States, 564 U.S. 522, 131 S.Ct. 2685, 180 L.Ed.2d 519 (2011). Pursuant to Justice Sotomayor’s controlling concurrence, a term of imprisonment imposed under a Rule 11(c)(1)(C) plea agreement is “based on” the Guidelines if the agreement either “call[s] for the defendant to be sentenced within a particular Guidelines sentencing range,” or “provide[s] for a specific term of imprisonment ... [and] make[s] clear that the basis for the specified term is a Guidelines sentence range applicable to the offense to which the defendant pleaded guilty.” Freeman, 564 U.S. at 538-39, 131 S.Ct. 2685 (Sotomayor, J., concurring in judgment).

Applying Freeman, the district court concluded that Jordan’s sentence was not “based on” the 'Guidelines — and that he was consequently ineligible for a sentence reduction — for three reasons: (1) the plea agreement does not contain a “clear link” between the agreed-upon sentencing range and the Guidelines; (2) the agreement disclaims any connection to the Guidelines; and (3) the agreed-upon range was lower than the range applicable to Jordan as calculated by the PSR. We disagree and conclude that Jordan’s sentence was “based on” the Guidelines within the meaning of § 3582(c)(2).

A

If a Rule 11(c)(1)(C) agreement calls for a defendant to be sentenced within a particular Guidelines sentencing range, “the district court’s acceptance of the agreement obligates the court to sentence the defendant accordingly, and there can be no doubt that the term of imprisonment the court imposes is ‘based on’ the agreed-upon sentencing range within the meaning of § 3582(c)(2).” Freeman, 564 U.S. at 538, 131 S.Ct. 2685. Jordan’s plea agreement stated: “The parties propose, as an appropriate disposition of the case, assessing a Guideline offense level of 31, for a sentencing range of 135 months to 168 months in prison.... ” This proposed range plainly contemplates a sentence “based on” a particular Guidelines sentencing range and bound the district court upon its acceptance of the parties’ plea agreement. See United States v. Leonard, 844 F.3d 102, 111 (2d Cir. 2016) (“[W]hen an 11(e)(1)(C) agreement thus expressly uses the Guidelines to identify the agreed-upon sentencing range, a district court’s acceptance of the agreement and its imposition of the agreed-upon sentence satisfies the ‘based on’ requirement of § 3582(c)(2).”).

Both the government and the district court suggest that the sentencing range in Jordan’s plea agreement cannot be linked to the Guidelines because the agreement omits any reference to his criminal history category. But this omission is not dispositive. Because the terms of the agreement are clear that the proposed sentencing range comes from the Guidelines, there is no need for additional information. Moreover, Justice Sotomayor’s concurrence contemplates that even if an agreement proposes a specific sentence rather than a range, the omission of certain sentencing variables does not necessarily preclude a court from holding that the stipulated sentence was based on the Guidelines. See Freeman, 564 U.S. at 542-43, 131 S.Ct. 2685. Freeman’s plea agreement, which called for a 106-month sentence, specified his offense level and criminal history category but not the applicable sentencing range. Id. Justice Sotomayor expressly rejected the dissent’s contention that, in light of that missing information, there was no way of knowing that the proposed sentence was “based on” the Guidelines. Id. Looking to the Guidelines’ sentencing table, she used the offense level and criminal history category in the plea to identify the applicable sentencing range and concluded it was “evident” that the agreement arrived at its proposed sentence using the Guidelines. Id.

We do not need to conduct a similar analysis in this case because Jordan’s agreément calls for a sentencing range rather than a specific term of imprisonment; thus, the connection to the Guidelines is more apparent. However, we note that even if we were compelled to conduct such an analysis, the plea agreement contains sufficient information for us to confirm that the agreed-upon sentencing range was based on the Guidelines. An offense level of 31 and a Guidelines range of 135 to 168 months correspond to a criminal history category of III. This is consistent with the PSR’s determination of Jordan’s criminal history category, as well as the parties’ representations at the change of plea hearing. It is therefore “evident” that the plea agreement, and Jordan’s subsequent sentence, was based on a Guidelines sentencing range.

The district court reached the opposite conclusion after identifying cases in which the omission of particular sentencing variables from a plea agreement precluded a determination that the defendant’s sentence was based on the Guidelines. However, those cases involved plea agreements proposing a specific term of imprisonment rather than a Guidelines sentencing range. Accordingly, those authorities do not control the outcome of this case. Moreover, they are distinguishable from Freeman in that the parties’ plea agreements stipulated to a sentence without providing either the applicable Guidelines range or enough additional information, such as criminal history category or offense level, to make “evident” that the agreements were based on the Guidelines. See, e.g., United States v. Jones, 634 Fed.Appx. 649, 651-53 (10th Cir. 2015) (unpublished) (plea agreement stipulated to 105-month sentence without stating sentencing range or criminal history category); Graham, 704 F.3d at 1278-79, 1278 n.5 (plea agreement not reduced to writing and merely stipulated to 25-year sentence); United States v. Austin, 676 F.3d 924, 930 (9th Cir. 2012) (plea agreement provided for 17-year term without including sentencing range or criminal history category), overruled on other grounds by Davis, 825 F.3d at 1022; United States v. Rivera-Martinez, 665 F.3d 344, 345-46, 349-50 (1st Cir. 2011) (plea agreement imposed 240-month sentence but said nothing about sentencing range or criminal history category).

B

Our conclusion that Jordan was sentenced based on the Guidelines for purposes of § 3582(c)(2) is not altered by a provision in the plea agreement stating that the parties are not requesting imposition of an advisory Guidelines sentence. In interpreting a plea agreement, we must consider the agreement as a whole and construe it in a manner reflecting what the defendant reasonably understood when he entered the plea. See United States v. Veri, 108 F.3d 1311, 1313-14 (10th Cir. 1997) (disregarding provision that ran contrary to meaning of plea agreement “[w]hen read from beginning to end”). Considering Jordan’s agreement as a whole, we conclude that its inclusion of both a disclaimer of reliance on the Guidelines and an express reference to a Guidelines sentencing range renders the agreement ambiguous. Because ambiguities in plea agreements are' construed against the government, see United States v. Guzman, 318 F.3d 1191, 1195 (10th Cir. 2003), the mere presence of the disclaimer provision is not conclusive.

Other cases addressing the effect of similar disclaimer provisions are distinguishable because they involved plea agreements stipulating to specific sentences without reference to a Guidelines range. Thus, because the link between the stipulated sentence and the Guidelines was somewhat more tenuous, the disclaimer provision did not create the same ambiguity that it does in this case. See, e.g., United States v. Dozal, 644 Fed.Appx. 851, 853 (10th Cir. 2016) (unpublished); United States v. Falcon-Sanchez, 622 Fed.Appx. 766, 767 (10th Cir. 2015) (unpublished); United States v. Price, 627 Fed.Appx. 738, 741-42 (10th Cir. 2015) (unpublished). Further, none of these cases concluded that the disclaimer provision is dispositive of a defendant’s eligibility for § 3582(c) relief; instead, each correctly treated the presence of the disclaimer as merely one factor to be considered in determining whether the stipulated sentence was based on the Guidelines.

C

The final issue is whether a sentencing range proposed in a plea agreement can be “based on” the Guidelines if that range differs from the one calculated by the district court. In this case, the district court adopted the PSR, which calculated Jordan’s sentencing range as 168 to 210 months. In contrast, Jordan’s plea agreement provided for a range of 135 to 168 months. Relying on this discrepancy, the government argues, and the district court agreed, that the sentencing range used in the plea agreement was not the range “applicable to” Jordan’s offense, and that consequently, Jordan was not sentenced “based on” the Guidelines. •

As stated supra, a defendant is eligible for a § 3582(c)(2) sentence reduction if two requirements are satisfied: (1) the original sentence is “based on” a subsequently-lowered Guidelines range; and (2) a reduction would be consistent with the applicable policy statement, which permits a reduction if “the guideline range applicable to” the defendant has been lowered. U.S.S.G. § 1B1.10(a)(1). The commentary to § 1B1.10(a) further defines the “applicable guideline range” as “the guideline range that corresponds to the offense level and criminal history category [determined by the district court] ... before consideration of any departure provision ... or ... variance.” § 1B1.10 cmt. n.1(A). The government conflates these two prongs, arguing that the “based on” requirement can only be satisfied in the Rule 11(c)(1)(C) context if the defendant’s sentence is “based on” a Guidelines range that is also “applicable to” his offense. We disagree that these two inquiries must necessarily be the same.

In cases that did not involve Rule 11(c)(1)(C) agreements, this court has stated that the phrases “based on” and “applicable to” reflect the same inquiry for purposes of § 3582(c)(2). See United States v. Darton, 595 F.3d 1191, 1194 (10th Cir. 2010); United States v. Dryden, 563 F.3d 1168, 1170-71 (10th Cir. 2009). Yet the Rule 11(c)(1)(C) context is unique. As Justice Sotomayor explained in Freeman, “it is the parties’ agreement that controls in the (C) agreement context.” 564 U.S. at 542 n.8, 131 S.Ct. 2685. Thus, “even if the District Court had calculated the range differently than the parties, [a defendant] would still be eligible for resentencing as long as the parties’ chosen range was one that was subsequently lowered by the Sentencing Commission.” Id. (citation, quotation, and ellipsis omitted).

Relying on this statement in Freeman, both the Second and the Sixth Circuits have held that a term of imprisonment imposed pursuant to a Rule 11(c)(1)(C) plea agreement can be “based on” the Guidelines for purposes of § 3582(c)(2), even if the parties’ agreed-upon sentencing range differs from the range calculated by the district court. See Leonard, 844 F.3d at 111-12; United States v. Smith, 658 F.3d 608, 612-13 (6th Cir. 2011). We agree. Despite the discrepancy in this case between the parties’ agreed-upon sentencing range and the range calculated by the district court, we conclude that Jordan satisfies the “based on” requirement of § 3582(c)(2) because his plea agreement expressly proposes a Guidelines sentencing range.

III

We also conclude that the second requirement for § 3582(c)(2) eligibility— that a sentence reduction be consistent with the applicable policy statement, which requires a showing that the Guidelines range “applicable to” Jordan has been lowered — is met. In so holding, we need not determine whether the range “applicable to” Jordan is the range proposed in the parties’ plea agreement or the one calculated by the PSR, because both ranges were subsequently lowered by Amendment 782 to the Guidelines. In addition, neither party has specifically briefed the issue, and Jordan appears to concede that the “applicable” range is the range calculated by the district court. His § 3582(c)(2) motion requests a reduced sentence of 135 months— the low end of the PSR’s proposed range, as subsequently amended. And he asks us to adopt the reasoning of Leonard, which held that the range “applicable to” the defendant was the range independently calculated by the district court before acceptance of the plea agreement. See 844 F.3d at 116. Accordingly, for purposes of determining the extent of the sentence reduction for which Jordan is eligible on remand, we assume without deciding that the approach in Leonard is correct and that the Guidelines range applicable to Jordan’s offense is the range identified in the PSR, as subsequently lowered by Amendment 782. But see Smith, 658 F.3d at 613 (concluding prior to the § 1B1.10 commentary discussed in Leonard that the Guidelines range “applicable to” the defendant was the range provided in the plea agreement).

In making this assumption, we reject the suggestion that Jordan is ineligible for relief simply because his applicable Guidelines range, as amended, is identical to the agreed-upon range under which he was originally sentenced. This may affect the district court’s ultimate determination as to whether Jordan is entitled to a sentence reduction; however, as long as Jordan could receive a lower sentence under the amended Guidelines, this fact does not bear on the court’s jurisdiction to hear Jordan’s motion in the first instance. See Freeman, 564 U.S. at 541, 131 S.Ct. 2685 (“[I]n cases where the Government believes that even the limited sentence reduction authorized by § 3582(c)(2) and USSG § 1B1.10 improperly benefits the defendant, it can argue to the district court that the court should not exercise its discretion under the statute to reduce the sentence.”); Leonard, 844 F.3d at 116 (“[W]e do not know what weight the district court gave the initial applicable Guidelines range in granting the variance reflected in the parties’ agreed-to lower range. Thus, we cannot be certain that if the district court were presented with a lower applicable range equal to the agreed-to range, it would not sentence at the lower end of the range.”).

IV

For the foregoing reasons, the district court’s dismissal of Jordan’s § 3582(c)(2) motion is REVERSED. We REMAND to the district court to determine whether, consistent with the principles announced herein, Jordan should receive a reduced sentence under 18 U.S.C. § 3582(c)(2).

      . This circuit has previously determined that Justice Sotomayor's concurrence offers the narrowest grounds for the Court's decision and therefore controls. Graham, 704 F.3d at 1278. Jordan suggests this court should revisit that conclusion in light of recent decisions by the Ninth and D.C. Circuits adopting the plurality's approach in Freeman. See United States v. Davis, 825 F.3d 1014, 1026 (9th Cir. 2016); United States v. Epps, 707 F.3d 337, 350-51 (D.C. Cir. 2013). However, "[w]e are bound by the precedent of prior panels absent en banc reconsideration or a superseding contrary decision by the Supreme Court.” In re Smith, 10 F.3d 723, 724 (10th Cir. 1993) (per curiam).

      . We further reject the government’s contention that the plea agreement was required to specify the drug quantify attributable to Jordan. Again, the parties' sentencing calculations are supported by the sentencing factors identified in the plea agreement, as well as the agreement’s factual basis, which suggests a finding that Jordan conspired to obtain ten kilograms of cocaine. At the time of Jordan’s sentencing, that quantify of cocaine corresponded to a base offense level of 32. See U.S.S.G. § 2D1.1(c)(4) (2008). After the parties’ agreed-upon two-level increase for possession of a firearm and three-level reduction for acceptance of responsibility, Jordan’s total offense level would be 31, as reflected in the plea agreement.

      . We note that the issue presented in this case was not before the Court in Freeman because there was no discrepancy between the district court’s sentencing calculations and the sentence proposed by the parties. See id. at 527, 131 S.Ct. 2685 (plurality op.).

      . In United States v. White, 765 F.3d 1240 (10th Cir. 2014), we reaffirmed Darton and Dryden post-Freeman. Id. at 1248-49. But as in both Darton and Dryden, White did not involve a Rule 11(c)(1)(C) plea agreement, and the decision makes clear that it is affirming the prior cases only in the non-Rule 11(c)(1)(C) context. Id. at 1249 ("In so holding, we note that every circuit to consider Freeman's effect on its non-(c)(1)(C) 'based on’ jurisprudence has agreed.” (emphasis added)).
      Notably, the issue in White was whether a defendant was sentenced "based on” a subsequently-Iowered Guidelines range for purposes of a § 3582(c) reduction when he was subject to a mandatory minimum sentence but the district court relied on the Guidelines to apply a discretionary upward variance. Id. at 1241, 1245. Accordingly, the conclusion in White, that a defendant’s sentence is "based on” the range produced under a correct Guidelines calculation and prior to any discretionary departures, was intended to clarify only that a defendant is not eligible for a sentence reduction if the Guidelines were relied upon solely to calculate a discretionary upward departure. It therefore does not control our analysis in this case.

      . Because we have determined that the sentencing range in the parties’ plea agreement was "based on” the Guidelines, we do not address Jordan’s alternative argument that he was sentenced based on the sentencing range identified in the PSR.

      . In determining that the "applicable” range for purposes of the Guidelines policy statement is the range independently calculated by the district court, not the range agreed upon by the parties, the Second Circuit relied on the post-Freeman commentary to § IB 1.10, discussed supra. See Leonard, 844 F.3d at 112-17. Citing this commentary, Leonard concluded that “when a district court accepts an 11(c)(1)(C) sentence or sentencing range that is lower than its calculated Guidelines range, what the court effectively does is grant a departure or variance.” Id. at 113. The Second Circuit affirmed the authority of courts to grant such a variance, while stating that the acceptance of a parties' plea agreement "does not transform the lower agreed-upon range into the applicable Guidelines range.” Id. at 113-14. Accordingly, although both the 97-to-121-month sentencing range in the plea agreement and the 121-to-151-month range calculated by the district court in Leonard were subsequently lowered by Guidelines Amendments, the district court was only authorized to reduce Leonard's sentence to the low end of the latter range, as amended — i.e., the range "applicable to” his offense. Id. at 116.


author: WILLIAM PRYOR, Circuit Judge:

text:
    Sean FREIXA, on behalf of himself and others similarly situated, Plaintiff-Appellant, v. PRESTIGE CRUISE SERVICES, LLC, a Delaware Limited Liability Company, Prestige Cruise Holdings, Inc., a Foreign Corporation, et al., Defendant-Appellee.
    No. 16-13745
    United States Court of Appeals, Eleventh Circuit.
    (April 13, 2017)
    Sam Jones Smith, Loren Donnell, Tamra Givens, Burr & Smith, LLP, St. Peters-burg, FL, Keith M. Stern, Law Office of Keith M. Stern, PA, Miami, FL, Robert S. Norell, Robert S. Norell, PA, Plantation, FL, for Plaintiff-Appellant.
    Mark J. Neuberger, Angelica Leigh Boutwell, Larry Scott Perlman, Foley & Lardner, LLP, Miami, FL, for Defendants-Appellees.
    Dean Romhilt, U.S. Department of Labor, Office of the Solicitor, Washington, DC, for Amicus Curiae Secretary, U.S. Department of Labor.
    Before WILLIAM PRYOR and MARTIN, Circuit Judges, and DUFFEY, District Judge.

       Honorable William S. Duffey, Jr., United. States District Judge for the Northern District of Georgia, sitting by designation.

   WILLIAM PRYOR, Circuit Judge:

This appeal requires us to decide whether, in calculating an employee’s hourly rate of pay to determine if he is exempt from federal overtime laws, a district court may allocate the employee’s commissions to hours worked outside the periods in . which the commissions were earned. Sean Freixa sued a former- employer, Prestige Cruise Services, LLC, for overtime pay. Federal law required the district court to calculate Freixa’s hourly rate of pay on a week-to-week basis to determine whether Freixa was exempt from federal overtime laws. 29 U.S.C. § 207(i). Because part of Freixa’s remuneration included commission payments that were computed and earned monthly, the district court concluded that it was “not possible or practicable” to determine exactly how much Freixa earned in commissions in each individual week, 29 C.F.R. § 778.120. It instead divided Freixa’s entire remuneration for the year he worked across every hour in every week he worked that year. That calculation produced an average hourly rate above the exemption threshold, so the district court awarded summary judgment in favor of the cruise service. But federal law bars allocating a commission payment across weeks that fall outside the period in which the payment was earned. Id. We reverse and remand.

I. BACKGROUND

From December 7, 2013, to December 19, 2014, Sean Freixa sold cruises for Prestige Cruise Services, LLC. Freixa received a fixed salary of $500 per week plus commissions. He earned over $70,000 in total compensation during his employment, sixty-three percent of which he received in commissions.

The cruise service calculated commissions monthly and disbursed payments of the commissions the following month. To calculate the commissions due for each month, the cruise service assessed the sum of all bookings an employee completed in the month and subtracted bookings the employee completed in previous months that were cancelled in the current month. The cruise service then multiplied the gross number of bookings by a percentage that changed progressively. An employee with three or fewer gross bookings received no commissions, but an employee with four, five, or six received a commission of 1.25 percent on each booking. For example, Freixa earned almost $9,000 in commissions on March 28, 2014, for work performed between February 1 and February 28, 2014. But he received no commission payments for work performed in July and November.

Freixa sued the cruise service for overtime pay and alleged that his compensation in certain weeks fell below $10.88 per hour, the minimum amount an employee must receive to be exempt from federal overtime requirements, §§ 206(a)(1)(C), 207(i). Both parties moved for summary judgment. The' parties agreed that Freixa worked an average of sixty hours per week during his employment, but they disagreed about the number of hours he worked in any individual week.

The district court acknowledged that the law generally requires calculating the regular rate of pay on a week-to-week basis but found it difficult to determine the exact weeks during which Freixa earned commissions. So the district court invoked a federal regulation that permits use of a different “reasonable and equitable method” of calculation “[i]f it is not possible or practicable to allocate the commission among the workweeks of the period in proportion to the amount of commission actually earned or reasonably presumed to be earned each week.” 29 C.F.R. § 778.120. The district court then divided Freixa’s entire remuneration for the year across every hour in every week he worked — assuming sixty hours per week— and arrived at an average hourly rate of $23.45. Because that rate exceeded the exemption threshold of $10.88 per hour, the district court awarded summary judgment in favor of the cruise service.

II. STANDARDS OF REVIEW

“This Court reviews de novo summary judgment rulings and draws all inferences and reviews all evidence in the light most favorable to the non-moving party.” Craig v. Floyd Cty., 643 F.3d 1306, 1309 (11th Cir. 2011) (quoting Moton v. Cowart, 631 F.3d 1337, 1341 (11th Cir. 2001)). “Summary judgment is appropriate ‘if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment-as a matter of law.’ ” Id. (quoting Fed. R. Civ. P. 56(a)). We review the interpretation of a statute or regulation de novo. United States v. Hoffman-Vaile, 568 F.3d 1335, 1340 (11th Cir. 2009) (statute); Stansell v. Revolutionary Armed Forces of Colom., 771 F.3d 713, 733 (11th Cir. 2014) (regulation).

III. DISCUSSION

The Fair Labor Standards Act requires employers to pay overtime compensation to employees who work more than forty hours in a single week. 29 U.S.C. § 207(a)(1). The Act relieves an employer of this requirement for any employee of a retail or service establishment “if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him ..., and (2) more than half of his compensation for a representative period (not less than one month) represents commissions on goods and services.” § 207(i). The “regular rate of pay” includes commissions, not only salary. § 207(e); 29 C.F.R. § 778.117.

The parties dispute whether the district court used an acceptable method to calculate Freixa’s regular rate of pay. We conclude that it did not. The district court invoked, but misapplied, a regulatory exception to the general rule about calculating overtime pay.

A district court ordinarily may not allocate compensation or hours across multiple weeks. For example, a district court may not hold that an employee who worked thirty hours in one week and fifty in another is exempt from overtime laws because he averaged forty hours per week. 29 C.F.R. § 778.104. Instead, it must calculate both compensation and hours for each individual week because “[t]he Act takes a single workweek as its standard.” See id.; see also § 779.419(b) (establishing that courts should look to chapter 29, part 778 to “comput[e] the regular rate for purposes of the Act”). That is, the Act contemplates the employment of a person “for a workweek.” 29 U.S.C. § 207(i) (emphasis added). And we have held that “[t]he regular rate [of pay] is determined by dividing the ... total compensation during the workweek by the number of hours worked.” Klinedinst v. Swift Invs., Inc, 260 F.3d 1251, 1256 (11th Cir. 2001) (emphasis added) (citing C.F.R. § 779.419(b) (“[The regular rate of pay] is a rate per hour, computed for the particular workweek ....”)).

The district court invoked a regulatory exception to the general rule for calculating overtime pay because Freixa earned commissions monthly instead of weekly. That regulatory exception permits a district court to allocate commission payments across multiple weeks: “If it is not possible or practicable to allocate the commission among the workweeks of the period in proportion to the amount of commission actually earned or reasonably presumed to be earned each week,” a district court must adopt '“some other reasonable and equitable method” to calculate the hourly rate. § 778.120. The cruise service argues that the district court correctly calculated Freixa’s regular rate of pay under this exception because of the difficulty of allocating monthly commissions over individual weeks, but that difficulty does not mean that the district court could allocate Freixa’s commissions earned in one computation period to another computation period.

Although the computation structure for Freixa’s commissions makes it impracticable or impossible to determine any particular week in which he earned commissions, the district court misapplied the regulatory exception for allocating commissions. When commissions are computed monthly, a district court may not allocate commissions earned in one month across weeks worked in other months. Federal regulations instead limit a district court to allocating commissions across weeks within the time period in which the commissions were earned. One regulation provides that “it is necessary, as a general rule, that the commission be apportioned back over the workweeks of the period during which it was earned.” § 778.119 (emphasis added). And section 778.120 provides that a district court that is unable to allocate commissions to workweeks “in proportion to the amount of commission actually earned or reasonably presumed to be earned each week” must adopt “some other reasonable and equitable method” to “allocate the commission among the workweeks of the period.” Id. (emphasis added).

Although these regulations use the term “period,” the context makes clear that “period” means “computation period,” which, for Freixa, refers to each month of his employment, not the whole year he worked. Section 778.120 uses the phrase “computation period” eight times, id., and uses the term interchangeably with “period,” so we construe the terms to carry the same meaning. See Antonin Scalia & Bryan Garner, Reading Law: The Interpretation of Legal Texts 170 (2012) (“A word or phrase is presumed to bear the same meaning throughout a text ....”). Section 778.120 limits the district court to allocating monthly commissions only among the “workweeks of the [computation] period” — that is, each particular month.

The two examples of “reasonable and equitable method[s]” listed in the regulation further illustrate that a commission payment can be allocated only across the weeks that comprise the computation period for that particular payment. Section 778.120 provides that a district court may “[a]ssume that the employee earned an equal amount of commission in each week of the commission computation period.” § 778.120(a). A district court may also “assume that the employee earned an equal amount of commission in each hour that he worked during the commission computation period” if some facts “make it inappropriate to assume equal commission earnings for each workweek.” § 778.120(b). But the regulation nowhere suggests that a district court may allocate commissions across hours worked in weeks outside the relevant computation period.

The district court erred when it allocated commissions earned in one month across weeks worked in other months. Each commission payment that Freixa received reflected “commissions that were earned” within a single month. Under section 778.120, the district court could allocate commissions earned in January, for example, across weeks worked in January, but not across weeks worked from February through December.

Because the district court may allocate commissions across only the weeks in the period (in this case, the month) in which the commissions were earned, this case presents a genuine dispute about a material fact. The parties agreed that Freixa averaged, sixty hours per week over the course of his employment but disagreed about the number of hours Freixa worked in any individual week or computation period, so the record permits no. summary judgment.

IV. CONCLUSION

We REVERSE the judgment in favor of Prestige Cruise Services, LLC, and REMAND for further proceedings.