[00:00:00] Speaker 04: Good morning. [00:00:02] Speaker 04: May it please the Court, James Siegel on behalf of Apple. [00:00:05] Speaker 04: I'd like to reserve three minutes of my time for rebuttal. [00:00:07] Speaker 02: We'll try to help you. [00:00:08] Speaker 02: Keep your eye on the clock, please. [00:00:10] Speaker 04: Thank you, Your Honor. [00:00:11] Speaker 04: CBC is attempting to use 28 USC 1782 to compel Apple to export some of its most sensitive information concerning the biometric security measures on millions of users' devices to Germany. [00:00:25] Speaker 04: will be subject to counsel. [00:00:26] Speaker 02: With respect, I'm trying to cut to the chase here. [00:00:31] Speaker 02: There is so much unsaid, unspoken in the request that the district court did not deal with at this point that we're really in a quandary, at least I'm in a quandary about whether [00:00:48] Speaker 02: This matter is finalized enough that we even have jurisdiction. [00:00:53] Speaker 02: Why isn't this case like Banca Pueyo from the Fifth Circuit? [00:00:58] Speaker 04: Well, Your Honor, I think it turns on how this Court understands the District Court's order and what it leaves open for Apple to continue to argue on remand. [00:01:05] Speaker 04: So it's certainly the case. [00:01:07] Speaker 04: I don't think we would argue that it's been definitively determined exactly what Apple will have to produce and what might be exported to Germany. [00:01:15] Speaker 04: But we understand the district court's decision to at least foreclose certain of the key arguments that APA would be making against the export. [00:01:23] Speaker 02: But what, for example, I know you've spoken of the source code, and I get that. [00:01:27] Speaker 02: That's an important factor. [00:01:29] Speaker 02: But there are like 15 categories, as I recall. [00:01:32] Speaker 02: It's all in the broadest possible terms. [00:01:35] Speaker 02: I don't pretend to be a tech expert, but I know something about it. [00:01:39] Speaker 02: And I have no idea how looking at the language of the request that you can specifically state that you are required to produce source code. [00:01:48] Speaker 02: What am I missing? [00:01:50] Speaker 04: Well, you know, we had the experience from the prior U.S. [00:01:52] Speaker 04: litigation. [00:01:53] Speaker 04: I should say that it's still ongoing. [00:01:56] Speaker 04: It was Texas. [00:01:57] Speaker 04: It was transferred here. [00:01:58] Speaker 04: Right. [00:02:00] Speaker 04: Essentially, CPC is called the corresponding patent. [00:02:03] Speaker 04: It's the 705 patent, which it claims corresponds to the patent it would assert in a potential German lawsuit, which it hasn't brought yet. [00:02:12] Speaker 04: And there, the parties engage in substantial discovery. [00:02:15] Speaker 04: And so it's that experience which leads Apple to know what will be responsible for these discoveries. [00:02:21] Speaker 03: So I guess you're saying there's maybe a likelihood that you would have to produce the source code. [00:02:25] Speaker 03: But you haven't been ordered to do that yet. [00:02:28] Speaker 04: Well, the district court's 1782 order authorizes CPC to serve a subpoena that would then compel Apple to produce that information. [00:02:36] Speaker 03: Right, but I thought you have filed objections, you served objections to the subpoena. [00:02:40] Speaker 04: We've preserved our objections, Your Honor, yes, but we've essentially just stated that we don't believe that the district court should have granted this 1782 order in the first place. [00:02:49] Speaker 00: It seems premature to me because you served your objections and there's been no motions to compel. [00:02:56] Speaker 00: Is there anything that would prevent you from appealing again if you kind of run it through? [00:03:02] Speaker 00: Because I'm struggling with the same thing that Judge Smith is struggling with. [00:03:06] Speaker 00: It's really difficult to figure out [00:03:09] Speaker 00: how to assess the intel factors without knowing the scope of the discovery that you're eventually going to be ordered to produce. [00:03:17] Speaker 00: You're right that it seems the district court feels that some discovery is necessary and it's likely that he would order the production of some discovery, but the scope of that, whether you would have a problem with that, that's really unclear on this current record. [00:03:32] Speaker 04: Well, your honor, I think to answer your initial question, it is possible there could be a subsequent appeal. [00:03:37] Speaker 04: I don't necessarily think that deprives this particular order that we're appealing here of finality, and this is court-recognized in its prior decision in this case. [00:03:47] Speaker 04: You know, often there can be follow-on proceedings following the entry of final judgment. [00:03:54] Speaker 04: Those can result in appeals. [00:03:56] Speaker 04: So it might well be that this court has jurisdiction now to entertain Apple's appeal from the 1782 order. [00:04:04] Speaker 04: And then if there is subsequent motion of quash proceedings, which would compel proceedings [00:04:08] Speaker 04: further litigation that leads to another order, Apple might then appeal that just as it might appeal the denial of, say, attorney's fees order. [00:04:16] Speaker 03: Right, but I mean, attorney's fees really are regarded as somewhat ancillary to the judgment, whereas here the judgment is essentially the documents. [00:04:23] Speaker 03: And as it stands right now, you made some legal, your client made some legal objections to the 1782 application, those were rejected, but that doesn't mean [00:04:32] Speaker 03: It doesn't tell us what you're going to have to be required to provide, and it's not as though there's a meeting of the minds between the parties on that point either. [00:04:41] Speaker 04: That's fair, Your Honor. [00:04:43] Speaker 04: I would acknowledge that there does remain significant litigation that might fall in the district court. [00:04:49] Speaker 04: I think what this court's prior precedent has recognized that once the district court issues an order under 1782, that's ended the main event in the litigation, because again, this is litigation about whether discovery should be ordered. [00:05:04] Speaker 04: And so here what the district court said, it overruled the magistrate judge's findings that these requests were unduly evasive. [00:05:10] Speaker 02: As you well know, this is the second round with this. [00:05:13] Speaker 02: And in the first one, we had a magistrate judge saying that I deny the order. [00:05:18] Speaker 02: So then it was clear that nothing further for the district court to do. [00:05:22] Speaker 02: And we said we went from where we were there. [00:05:25] Speaker 02: Here, from my perspective, like the Banca Puea, where you have [00:05:33] Speaker 02: basically so many unknowns so much that the district courts going to have to clarify or the party will have to agree upon [00:05:42] Speaker 02: I guess in hard terminology, I'm not sure this is final under 1291. [00:05:47] Speaker 02: How do we have jurisdiction? [00:05:48] Speaker 02: As you well know, our first obligation is to determine whether we have jurisdiction. [00:05:54] Speaker 02: In Mancapoya, the Fifth Circuit concluded in a somewhat similar case, they didn't have jurisdiction. [00:06:00] Speaker 02: Why isn't this case somewhat analogous at this point to the Mancapoya? [00:06:05] Speaker 04: I acknowledge it is somewhat analogous, Your Honor. [00:06:08] Speaker 04: I think the key distinction is that in the Banca Puea case, the Fifth Circuit case, the magistrate judge there had essentially invited the parties to file an additional motion to quash. [00:06:19] Speaker 04: So it denied a motion to quash, but it said, you know, I haven't really addressed a lot of the issues here. [00:06:26] Speaker 04: Please file another one that might actually change the scope of discovery. [00:06:30] Speaker 02: But here the only difference is there's a stay motion, right, or there's a stay in place. [00:06:33] Speaker 04: There is a stand place, Your Honor, yes, but the district court do think it really depends on how this court reads the district court's order and what it thinks it leaves open to Apple to argue on remand. [00:06:44] Speaker 03: What does Apple intend to do? [00:06:46] Speaker 03: I mean, in other words, if the stay were lifted, what are the next steps in the district court? [00:06:51] Speaker 04: Well, Apple could conceivably file a motion to quash or could resist a motion to compel. [00:06:57] Speaker 04: There's also a provision in the protective order that requires CPC to get permission from the magistrate judge before exporting any information to Germany. [00:07:07] Speaker 04: So those are all sort of potential litigation touch points where we could make arguments, but presumably the arguments that Apple could make are limited by the district court's order. [00:07:17] Speaker 04: which is already determined that the 1782 factors that the Intel factors would compel this production here. [00:07:23] Speaker 02: Can I get back to what my colleague mentioned earlier about the Intel factors? [00:07:30] Speaker 02: As you know the district court did go through the four factors and spent a fair amount of time on the fourth factor which is the [00:07:36] Speaker 02: the most difficult one in this case, but I don't know how we, as a court of appeal, based upon this record, can appropriately analyze the fourth intel factor, given the indeterminacy of the request, the 15 requests. [00:07:54] Speaker 02: To me, it's an open book. [00:07:57] Speaker 02: It's not at all clear what's being requested. [00:08:00] Speaker 02: So how can we tell whether it's burdensome or not, for example? [00:08:03] Speaker 04: Well, I think it's the prior litigation [00:08:06] Speaker 04: is between Apple and CBC in the U.S. [00:08:08] Speaker 04: is what sort of clarifies the issues here and makes clear that there really is extremely confidential information that's at stake. [00:08:16] Speaker 04: So CBC has public information available to it. [00:08:19] Speaker 04: It's gotten substantial amounts of non-confidential information from that prior litigation. [00:08:24] Speaker 04: It actually relied on that public information almost entirely, moving for summary judgment for infringement on the 705 patent, which is the one corresponding to the one that CBC claims. [00:08:34] Speaker 04: it will raise in the German litigation, which, again, has not yet even filed. [00:08:38] Speaker 04: So the only reason it's bringing the 1782 action, or it's continuing to pursue the 1782 action, is to get the confidential information that Apple previously produced. [00:08:46] Speaker 04: And it's admitted that. [00:08:47] Speaker 04: It said in its briefing that it's trying to get the information that it's precluded from the protective order in the parallel US litigation from using to bring suit in Germany. [00:08:57] Speaker 04: But it's never explained why it needs that confidential information. [00:09:00] Speaker 04: to bring suit in Germany. [00:09:01] Speaker 04: So that's why we think this just doesn't get out of the starting gate, because CPC is requesting extremely sensitive information. [00:09:09] Speaker 04: It's trying to export that to Germany, where courts have recognized the Eighth Circuit and the Andover case recognized. [00:09:13] Speaker 04: Let me ask you maybe a touchy question. [00:09:18] Speaker 02: Given the nature of the plaintiffs in this case, has Apple been asked by them [00:09:27] Speaker 02: for a certain amount of money will settle this you don't have to worry about given up your source code is this kind of a pressure situation from your perspective and there's certainly i i don't want to get too much into that the sort of discussion i think that there's been ongoing litigation [00:09:42] Speaker 04: In Australia, in the US, this sort of hypothetical lawsuit in Germany that CPC has been pressing is Apple essentially worldwide. [00:09:50] Speaker 04: And I would expect that there have been offers of settlement involved, but I don't want to sort of get too much into the weeds on that. [00:09:58] Speaker 04: So you don't know if specifically you can share with us? [00:10:00] Speaker 04: No, Your Honor, but I think Your Honor's hypothesis that there are likely settlement discussions is accurate. [00:10:06] Speaker 03: Is the hypothetical nature of the German proceeding some kind of bar to 1782 relief? [00:10:13] Speaker 04: It's not a categorical bar, Your Honor. [00:10:15] Speaker 04: No. [00:10:16] Speaker 04: Under the statutory factors that set out in 1782, as long as the proceeding is in reasonable contemplation, 1782 can be available. [00:10:23] Speaker 04: But it's still a relevant factor in determining whether 1782 discovery should actually be ordered. [00:10:30] Speaker 04: The Supreme Court and Intel actually recognize that the considerations that [00:10:34] Speaker 04: that play into, that the court had rejected certain categorical bars, but it said those proposed categorical bars, including sort of whether or not a suit had been filed in the foreign litigation, could be relevant in assessing the more discretionary intel factor. [00:10:47] Speaker 04: And here we think it bears directly on the intrusiveness of the request. [00:10:51] Speaker 02: What role, if any, does the PTAB's invalidation of your opponent's U.S. [00:10:59] Speaker 02: patents have, if any, [00:11:03] Speaker 04: I think it's a significant objective indicator that CPC's suit, prospective suit in Germany would lack merit. [00:11:09] Speaker 04: So the PTAB found that CPC's patents, including the 705 one that it claims is going to be the basis or the corresponding one for its suit in Germany, is obvious and thus invalid. [00:11:21] Speaker 00: Does it affect the scope of the discovery or this case to be remanded? [00:11:26] Speaker 04: We would ask for the remand so the district court could determine in the first instance whether the fact that we now have this clear indication that CPC's German suit likely would not even get off the ground is yet another reason to decline to give CPC access to this extremely sensitive information. [00:11:41] Speaker 04: So CPC hasn't shown why it would need this information in the first place, but then even if it were to show some sort of need, if it's trying to get this extremely sensitive information simply to bring a meritless lawsuit in Germany, there's really no reason that the risk [00:11:55] Speaker 04: of its disclosure should be incurred. [00:11:57] Speaker 03: What's the status of that PTAB proceeding? [00:12:01] Speaker 03: Is there further review of that ongoing? [00:12:04] Speaker 04: It's being appealed in the Federal Circuit, Your Honor, and the briefing is complete. [00:12:07] Speaker 04: I think it was completed in August, and we're just waiting for argument. [00:12:11] Speaker 02: Doesn't what you just said, though, kind of go to what we all collectively are sort of asking about, which is there seems to be so much ambiguity in what's being sought, particularly now [00:12:23] Speaker 02: that the PTAB has invalidated the patents, at least on the first step, that maybe we don't have jurisdiction. [00:12:29] Speaker 02: It's so indefinite. [00:12:31] Speaker 02: It's so unfinal, if you will. [00:12:33] Speaker 02: What's your comment about that? [00:12:34] Speaker 04: I don't think the PTAB's decision bears on the jurisdictional question. [00:12:37] Speaker 04: I do think it's a reason for remand. [00:12:40] Speaker 04: But I take Your Honor's point that the actual scope of discovery might be somewhat unsettled. [00:12:46] Speaker 02: You want to save any of your time there? [00:12:47] Speaker 04: Yes, please, Your Honor. [00:12:48] Speaker 04: Very well. [00:12:48] Speaker 04: Thank you. [00:12:49] Speaker 02: Okay, so Mr. Summerfield, please. [00:13:04] Speaker 01: Good morning. [00:13:04] Speaker 01: Good morning, Your Honor. [00:13:05] Speaker 01: May it please the Court, George Summerfield, on behalf of the Appellee CPC. [00:13:09] Speaker 01: I want to address two main arguments that Mr. Siegel raised. [00:13:12] Speaker 01: Number one, whether this is truly a final decision that this Court is currently reviewing. [00:13:16] Speaker 01: And number two, his repeated reference to the highly confidential nature that apparently Apple is now contending is mandated by the discovery requests posited below. [00:13:27] Speaker 01: Starting with the first issue, I listened very carefully to what Mr. Siegel said, and what I believe he said was that the things remaining to be done [00:13:36] Speaker 01: does not deprive this court of jurisdiction. [00:13:39] Speaker 01: Well, that certainly isn't the language from Firestone Tire by the Supreme Court. [00:13:43] Speaker 01: There it said something is final if there is nothing remaining for the court below to do except enforce the judgment. [00:13:49] Speaker 01: Well, we know that's not the case. [00:13:52] Speaker 01: Here, it's very clear that Apple doesn't believe that the scope of the discovery requests that CPC posited below are definite enough for them to simply produce documents. [00:14:04] Speaker 01: In response to each request, [00:14:06] Speaker 01: Apple objected and said that it was willing to meet and confer on the proper scope of each request. [00:14:13] Speaker 01: And very clearly, Apple has the ability, if the parties can't come to an agreement, to file for a motion to quash or some sort of motion for protective order. [00:14:22] Speaker 01: But did the meet and confer take place? [00:14:24] Speaker 01: No, it didn't, because the case was stayed in the interim, Your Honor. [00:14:27] Speaker 01: So we haven't even gotten that far. [00:14:30] Speaker 02: Is that the difference between the Banca Pueyo case and this one is the stay order in this case? [00:14:35] Speaker 01: that's right your honor nothing basically was able to happen because the district court state the matter before anything else could be done absent this day the parties would have proceeded to do the meet and confer to see if they could come up with an agreement and basically determine whether there was a set of discovery requests that would be palatable to everybody so in this case if we and I gather you are proposing this if we conclude [00:15:03] Speaker 02: based upon the reasoning of our sister circuit, that there's so much that's indefinite. [00:15:08] Speaker 02: There's lots for the district court to do. [00:15:10] Speaker 02: It's not final. [00:15:11] Speaker 02: If it goes back, in effect, if I understood your colleague, he's suggesting a remand is necessary for a different reason. [00:15:18] Speaker 02: But in effect, it all goes back to the district judge, and we're kind of back where we started from. [00:15:22] Speaker 02: But in our case, we don't really know what we're moving with. [00:15:25] Speaker 02: It's kind of like an amoeba. [00:15:26] Speaker 02: It keeps changing. [00:15:28] Speaker 02: And from my perspective, I mean, difficult time determining that this is a final order that we can have your section over. [00:15:37] Speaker 01: Well, Judge, CPC is the party that raised that issue. [00:15:39] Speaker 01: So yes, we are in agreement with Your Honor. [00:15:42] Speaker 01: Basically, there is still tasks remaining to be done by the district court. [00:15:48] Speaker 01: that according to the Supreme Court precludes the decision below from being final. [00:15:53] Speaker 01: So we shouldn't even be here. [00:15:55] Speaker 01: And trust me, that doesn't do CPC any favors, because basically this case has been delayed for a while. [00:16:01] Speaker 01: We would ordinarily like to be in a position to ask this court to rule that yes, the discovery requests are proper. [00:16:06] Speaker 01: Yes, Apple should be required. [00:16:08] Speaker 01: to produce the response of information, but as officers of the court, we couldn't say that in good faith. [00:16:14] Speaker 03: Is there any world in which Apple, in your view, is not required to produce the code? [00:16:19] Speaker 01: We don't know, Your Honor. [00:16:20] Speaker 01: As a matter of fact, that was the second point I wanted to raise. [00:16:23] Speaker 01: If we look at what Apple said about our discovery requests, it's very carefully worded [00:16:28] Speaker 01: Apple says that our requests target source code, that they implicate source code, but never do they say that the only way that they can answer a discovery request asking for documents sufficient to show how the accused devices work is by producing source code. [00:16:45] Speaker 03: But your position is at least standing here today is you don't know whether that's necessary or not. [00:16:49] Speaker 01: Apple's never told us, Your Honor. [00:16:51] Speaker 01: The only thing we hear from Mr. Siegel is, well, we have the experience of the first litigation in Texas. [00:16:56] Speaker 01: That's true. [00:16:57] Speaker 01: Apple chose to produce the source code. [00:17:00] Speaker 01: They chose to produce that information specifically. [00:17:04] Speaker 01: We didn't ask for it. [00:17:05] Speaker 01: We asked for similar requests sufficient to show. [00:17:08] Speaker 01: And what we got from them was source code, presumably because that is what they had available at the time. [00:17:14] Speaker 01: But I don't know, as we stand here today, whether Apple has anything else that will be sufficient to show how their iPhones operate. [00:17:22] Speaker 02: So if we send this back by declining jurisdiction because we don't have it, what happens next from your perspective? [00:17:30] Speaker 01: Presumably exactly what would have happened if the case never got stayed. [00:17:33] Speaker 01: The parties would sit down in a room, figure out whether there is, again, a universe of discovery requests that are acceptable to Apple, acceptable to CPC, and if not, we can address that issue with the court below. [00:17:45] Speaker 02: Has that happened before, or this would be the first time? [00:17:49] Speaker 01: This would be the first time, Your Honor. [00:17:50] Speaker 01: Basically, there is a long and tortured history [00:17:54] Speaker 01: with this case coming up here earlier, as the court noted, to address the question of whether the magistrate's denial of the petition in the first instance was dispositive or not. [00:18:03] Speaker 01: How long has this case been going on? [00:18:05] Speaker 01: Three and a half years, Your Honor. [00:18:07] Speaker 01: And in the three and a half years, we have not gotten a single document from Apple, including the very public information that Mr. Siegel references existing. [00:18:15] Speaker 03: You need it for the German proceeding. [00:18:17] Speaker 03: Is there a reason you couldn't proceed without this there? [00:18:20] Speaker 01: I'm sorry, with just public information, Your Honor? [00:18:24] Speaker 01: Correct. [00:18:26] Speaker 03: I don't know what you need to file in Germany to lay a claim there, but is it your position that you can't move forward there until you get what you think you need here? [00:18:33] Speaker 01: That's our opinion, Your Honor, because Apple can disavow whatever public information is out there. [00:18:39] Speaker 01: It didn't come from them. [00:18:41] Speaker 01: And it can simply say, that's not us. [00:18:43] Speaker 01: We didn't say that. [00:18:43] Speaker 01: It's not reliable, et cetera, et cetera. [00:18:45] Speaker 03: But your client hasn't tried in Germany yet. [00:18:47] Speaker 03: You haven't tried to put something down to see if it will stick without the information you're seeking here. [00:18:51] Speaker 01: That's correct, Your Honor. [00:18:52] Speaker 01: Basically, in Germany, there is no discovery. [00:18:54] Speaker 01: Everything is tried on the papers. [00:18:57] Speaker 01: So we don't have the benefit of filing in Germany and then hoping to get the discovery later on that we need from Apple. [00:19:04] Speaker 01: We have to have everything in line before a complaint is ever filed. [00:19:09] Speaker 02: And we believe that in this circumstance it has to be information from Apple that Apple cannot run away from as being authored by someone else. [00:19:26] Speaker 02: with prejudice, what we would call it, with prejudice. [00:19:29] Speaker 01: It would be. [00:19:29] Speaker 02: Because you wouldn't have the information. [00:19:31] Speaker 01: Yes, Your Honor. [00:19:32] Speaker 01: The German courts aren't going to give us two bites at the apple. [00:19:34] Speaker 01: If we don't have what we need at the beginning and lose, we can't go back a second time and say, how about this? [00:19:40] Speaker 00: Got it. [00:19:40] Speaker 00: Are there still ongoing challenges with regard to the invalidation of the patents before the PTAB? [00:19:48] Speaker 00: I'm not sure what their [00:19:49] Speaker 00: appeal litigation processes, but I understand there's been a series of decisions. [00:19:54] Speaker 00: Are there still ongoing proceedings there in which you have to await the outcome of that before filing suit in Germany? [00:20:00] Speaker 01: So the one patent in question that affects any prospective litigation in Germany has a German correspondent. [00:20:07] Speaker 01: There is one patent that the PTAB, the Patent Trial and Appeal Board, has ruled to be invalid. [00:20:12] Speaker 01: CPC has appealed that decision to the Federal Circuit. [00:20:15] Speaker 01: So right now, the PTAB is divested of jurisdiction with the Federal Circuit sitting in appeal over that decision. [00:20:22] Speaker 01: And as Mr. Siegel correctly stated, briefing is done. [00:20:25] Speaker 01: We're just waiting for oral argument at this point. [00:20:27] Speaker 01: So there, whether the PTAB's decision stands or not is an open question. [00:20:34] Speaker 01: But more importantly, what would be at issue in Germany is a German patent, not a U.S. [00:20:39] Speaker 01: patent. [00:20:40] Speaker 01: And the German courts aren't bound by what the PTAB or anyone else in the United States has to say about a U.S. [00:20:46] Speaker 02: patent. [00:20:51] Speaker 02: matters that you're claiming? [00:20:53] Speaker 01: It is the foreign counterpart, Your Honor, so yes. [00:20:56] Speaker 02: But again, whatever they call it, the foreign counterpart, there is such a beast, if you will. [00:21:01] Speaker 01: Yes, patents are territorial. [00:21:03] Speaker 01: If one wants patent protection in a particular country, one has to file for a patent in that country. [00:21:09] Speaker 01: So CPC had to obtain a patent in Germany to get patent protection there. [00:21:14] Speaker 01: And you have that? [00:21:15] Speaker 01: We do. [00:21:15] Speaker 01: Yes, Your Honor, and that would be the basis of the contemplated litigation. [00:21:19] Speaker 03: Apple seems to argue you're trying to go around a protective order in U.S. [00:21:22] Speaker 03: litigation. [00:21:23] Speaker 03: Do you want to respond to that? [00:21:24] Speaker 01: There's nothing in the protective order that prohibits filing for a Section 1782 petition, Your Honor. [00:21:30] Speaker 01: And if we were really looking to get around the protective order or avoid it or circumvent it or whatever term they're using, we would have just sent the information we already have to Germany. [00:21:41] Speaker 01: If we truly didn't care about what the protective order said, that would be our behavior. [00:21:45] Speaker 01: We're not doing that. [00:21:46] Speaker 01: We've spent three and a half years trying to get the information we want through a U.S. [00:21:51] Speaker 01: statute that allows us to do this. [00:21:54] Speaker 01: And if Mr. Siegel could stand up and rebuttal and point to something in the protective order that says, no matter what this protective order says, you can't file for a Section 1782 petition for discovery, fine. [00:22:05] Speaker 01: He can't. [00:22:06] Speaker 01: He could say the information produced in this litigation can only be used in this litigation, and that's true. [00:22:11] Speaker 01: But we're not trying to use the information produced in that litigation in Germany. [00:22:15] Speaker 01: We're trying to get them to produce information under the Section 1782 petition, whatever that might end up being. [00:22:22] Speaker 03: Can I ask you, and I mean, there's a huge question as to whether we even get there, but on the intel factors, what burden did the district court have to make some assessment of the quality of the protections in Germany? [00:22:33] Speaker 03: Because one thing that the court said was that, [00:22:34] Speaker 03: The protections are essentially unknown. [00:22:37] Speaker 03: We have an Eighth Circuit case that cast doubt on how strong those protections are. [00:22:42] Speaker 01: Your Honor, a couple points there. [00:22:43] Speaker 01: Number one, first of all, the court basically said, look, it doesn't really matter what goes on in Germany because you're bound by the proceedings here. [00:22:54] Speaker 01: There was a protective order negotiated by both parties below governing this very proceeding. [00:23:00] Speaker 01: Apple took part in that. [00:23:01] Speaker 01: And the parties concluded a protective order that governs what the parties do. [00:23:05] Speaker 01: So the court made the point that, look, whether there's protection sufficient to guard Apple's concerns or not, you guys are subject to the protective order here. [00:23:15] Speaker 01: And I can sanction you if there's any misbehavior at all. [00:23:17] Speaker 03: No, I understand that. [00:23:18] Speaker 03: I guess what I'm asking, though, is did the court have some further obligation to evaluate how good the German protections are? [00:23:27] Speaker 03: Your point is the district court can bind the parties here, they can sanction them, and you're right, he said that. [00:23:34] Speaker 03: But he also said, I don't know what will happen in Germany. [00:23:37] Speaker 03: And what I'm asking is, is that sufficient for the district court in these cases, or do they need to do something more in terms of examining what kind of protections the foreign legal system provides? [00:23:47] Speaker 01: Well, Your Honor, at least in the district court's earlier case in Palomar, [00:23:51] Speaker 01: That's the very reasoning it followed. [00:23:53] Speaker 01: So the case below cited to Palomir saying, look, there are sufficient protections here. [00:23:58] Speaker 01: And in this case, it's even more robust. [00:24:01] Speaker 01: The protective order we negotiated had a couple different provisions. [00:24:04] Speaker 01: Number one, there has to be an express protection for source code in the event it's produced at all. [00:24:10] Speaker 01: And secondly, we have to seek the approval of the magistrate judge before we use any information in Germany. [00:24:16] Speaker 01: Those two safeguards weren't present in Palomir, and the Northern District still said, [00:24:21] Speaker 01: that the safeguards are sufficient. [00:24:23] Speaker 01: The point, though, is, Judge, it's an abuse of discretion standard. [00:24:28] Speaker 01: And so the question is, did the court abuse its discretion in saying, my protective order is good enough? [00:24:34] Speaker 01: And the answer very clearly is no. [00:24:36] Speaker 01: What Apple offers up is hypotheticals. [00:24:39] Speaker 01: Maybe it's sufficient, maybe it's not. [00:24:42] Speaker 01: Maybe we're gonna be a party to the German action, maybe we're not. [00:24:45] Speaker 01: Maybe CPC is trying to circumvent the district court's protective order, maybe it's not. [00:24:50] Speaker 01: There's no evidence here that any of the intel factors weigh against issuing the 1782 discovery that the district court issued. [00:25:00] Speaker 01: At this point, all the evidence points to the fact that the intel factors weigh in favor of that production, or at least are neutral. [00:25:08] Speaker 02: My understanding is that in the German proceeding, you wouldn't actually be suing Apple Inc. [00:25:16] Speaker 02: It's a subsidiary or an affiliate. [00:25:18] Speaker 02: How does that correspond to this litigation where you're asking Apple itself for things embodied in the 15 requests? [00:25:32] Speaker 01: Basically, the accused product will be the same. [00:25:34] Speaker 01: It's the cell phones and the security mechanisms on the cell phones. [00:25:37] Speaker 01: So the documents are what they are, irrespective of wherever they come from. [00:25:42] Speaker 01: But the parties that would be the subject of the contemplated suit would be the parties that are actually doing the selling of those products in Europe. [00:25:50] Speaker 02: Okay, so they're the sellers, but basically you think the code or whatever, they get that from Apple, right? [00:25:58] Speaker 01: That's correct. [00:25:59] Speaker 01: And so there are plenty of instances in patent litigation where if you go to the seller, their answer always is, we don't know, ask the party that manufactures the products. [00:26:10] Speaker 01: We do not have information about those. [00:26:12] Speaker 00: So you committed in the district court to not suing Apple directly in Germany, right? [00:26:17] Speaker 01: That's correct. [00:26:18] Speaker 01: We would be suing two related parties, but not Apple Inc. [00:26:23] Speaker 01: And again, Apple's response is, who knows what's going to happen? [00:26:25] Speaker 01: Well, we do, because we're the ones that are going to be bringing the suit. [00:26:28] Speaker 01: And we've represented to the court on repeated occasions that the district court noted that we would not be suing Apple Inc. [00:26:34] Speaker 01: in Germany. [00:26:34] Speaker 01: And again, we're subject to Rule 11 below. [00:26:38] Speaker 01: So if we're lying, there's a remedy for that. [00:26:42] Speaker 01: And there's no motivation for us to bring Apple Inc. [00:26:47] Speaker 01: into the litigation there. [00:26:48] Speaker 01: There just isn't. [00:26:49] Speaker 01: And Apple hasn't pointed any. [00:26:52] Speaker 01: One last point I wanted to make, Your Honors, and that's with regard to whether this is just a pressure tactic. [00:26:58] Speaker 01: Mr. Siegel doesn't have the benefit of being involved in the district court litigation. [00:27:01] Speaker 01: I am. [00:27:02] Speaker 01: I can tell you that the only real overtures on settlement in this case have come from Apple, not from CPC. [00:27:08] Speaker 01: So there has never been any communication from CPC to Apple that says, hey guys, guess what? [00:27:14] Speaker 01: If you just write us a check, you don't have to worry about this source code nonsense anymore. [00:27:19] Speaker 01: That just hasn't happened. [00:27:21] Speaker 01: This is a legitimate request for discovery to support a legitimate litigation in Germany. [00:27:27] Speaker 01: And again, all of this presupposes that Apple at some point has to produce source code. [00:27:34] Speaker 01: The protective order they negotiated below said that there will have to be an additional provision to the protective order if source code is produced. [00:27:48] Speaker 01: If truly only source code is the only response of information, that provision would be nonsensical. [00:27:53] Speaker 01: But Apple agreed to it. [00:27:55] Speaker 01: only to argue that these protections are somehow now ineffective. [00:27:59] Speaker 01: Your honors, it's been three and a half years. [00:28:00] Speaker 01: We don't have a single document. [00:28:02] Speaker 01: I would like this case remanded to the district court so we can sort all this out and hopefully, finally, get discovery from Apple at the end of the day. [00:28:09] Speaker 01: Thank you. [00:28:09] Speaker 01: Thank you, counsel. [00:28:11] Speaker 01: Mr. Segal, you have a little time left. [00:28:16] Speaker 04: Thank you, and I'd just like to make three points. [00:28:18] Speaker 04: So first, counsel represented that they [00:28:21] Speaker 04: They need everything in line before they bring suit in Germany. [00:28:23] Speaker 04: I'm not aware, and CPC hasn't cited any case in which a party brought a 1782 action for prospective German litigation that had not yet been filed. [00:28:32] Speaker 04: They have cited, and I'm aware of, numerous cases where the German litigation had already been filed. [00:28:38] Speaker 04: Parties came to the US and got the 1782 discovery that they then used in Germany. [00:28:44] Speaker 02: Our point is simply that- Is it correct that Apple [00:28:49] Speaker 02: is in accord with the terms of the protective order. [00:28:54] Speaker 04: We negotiated the protective order, and we made it as expansive and protective as possible. [00:28:59] Speaker 04: But we are not in accord with the proposition that's sufficiently protective of our information, if it works. [00:29:04] Speaker 04: But what's in there, you agree with. [00:29:06] Speaker 02: Excuse me, Your Honor, sorry. [00:29:07] Speaker 02: What is in there, you do agree with. [00:29:09] Speaker 04: Oh, we agree that there should be substantial protections for source code once it's in the United States. [00:29:13] Speaker 04: We believe it needs to be applied to CBC. [00:29:16] Speaker 04: We believe that the magistrate judge needs to affirm relief. [00:29:20] Speaker 03: So what's inadequate about it? [00:29:21] Speaker 04: What's inadequate about it are two main things, Your Honor. [00:29:23] Speaker 04: First, they can't control what happens once this information is in any German proceeding. [00:29:29] Speaker 04: So that's exactly what the Andover case, the Eighth Circuit decision, recognized was the problem. [00:29:35] Speaker 04: So German court obviously is not bound by a US protective order. [00:29:38] Speaker 04: There are third parties that can get access to information that can intervene in German proceedings. [00:29:43] Speaker 03: I don't see how you could ever have a 1782 application that's successful. [00:29:48] Speaker 03: I mean, you can never buy into foreign court. [00:29:51] Speaker 04: You can never buy into foreign court, Your Honor, but there are circumstances in which the risks would not be as high as they are here. [00:29:57] Speaker 04: Again, we're talking about an entirely hypothetical litigation, never been filed, no showing of why this particular information would be needed. [00:30:03] Speaker 04: So counsel referenced the fact that it said the public information wasn't from Apple. [00:30:07] Speaker 04: it relied in its summary judgment papers on Apple-produced white papers. [00:30:10] Speaker 04: So I'm not exactly sure where that came from. [00:30:12] Speaker 04: And on top of that, so that there's no showing of need. [00:30:16] Speaker 04: And then in addition, we're talking about a requesting entity that has no significant assets in the United States. [00:30:23] Speaker 04: It's a foreign patent-holding company. [00:30:26] Speaker 04: So there's not even clear that it could be meaningfully enforced against CPC if it were to violate the protective order. [00:30:32] Speaker 04: So there's all these additional risks here that aren't [00:30:35] Speaker 04: present in the run-of-the-mill 1782 proceeding. [00:30:37] Speaker 04: And that's why we think that district court abuse of discretion. [00:30:39] Speaker 04: And Judge Bryce, you asked earlier sort of, does the district court have to consider what might happen in Germany? [00:30:44] Speaker 04: And our position is clearly yes. [00:30:46] Speaker 04: It does, because the ultimate question is whether this discovery will actually get out into the public. [00:30:51] Speaker 04: And our position is if the district court doesn't grapple with that, and she didn't hear, that's an abuse of discretion. [00:30:56] Speaker 02: Very well. [00:30:57] Speaker 02: Thank you, both counsel, for your argument. [00:30:59] Speaker 02: We appreciate it. [00:31:00] Speaker 02: The case just argued is submitted, and the court stands adjourned for the day.