[00:00:03] Speaker 01: Good morning, Your Honors. [00:00:03] Speaker 01: May it please the Court? [00:00:04] Speaker 01: Neil Lloyd. [00:00:05] Speaker 01: I'm here this morning for efficiency to present argument on behalf of the appellees in number 23-55368, the injunction appeal, and the appellants in number 23-55060, the intervention appeal. [00:00:21] Speaker 01: I'm joined by my law partner, Rachel Remke from Aaron Fox Schiff, and at the end of the table by Maggie Ebert from QTAC Rock, who is trial counsel for WG in the ongoing proceedings [00:00:32] Speaker 01: that remained after the district court's order, part of which is before the court. [00:00:37] Speaker 01: Because an affirmance in the injunction appeal will moot the intervention appeal, I'd like to start with two points about the injunction appeal. [00:00:46] Speaker 01: First is the 322,000. [00:00:47] Speaker 01: I'd like to take a minute to point the court to the undisputed record evidence showing that this money was spent properly and is fully accounted for. [00:00:59] Speaker 01: If the court looks at [00:01:01] Speaker 01: excerpts of record 376 to 405, which is Exhibit L to WG Summary Judgment Opposition. [00:01:10] Speaker 01: There's an email exchange between counsel for the parties, and it's followed by several redacted pages. [00:01:16] Speaker 01: These redacted pages contain financial information from WG prepared by a CPA and disclosed in that email exchange to the plaintiffs. [00:01:26] Speaker 01: The excerpts of record contain the public filing. [00:01:29] Speaker 01: Docket 159 at 136 to 155 is sealed filing, which is available to the court. [00:01:36] Speaker 01: I brought copies today in case the court would like to look, and I have a copy for opposing counsel. [00:01:41] Speaker 01: The first redacted page, excuse me, is a full accounting to the penny of this 322,000, followed by 25 lines with 25 lines of pages and pages of backup. [00:01:53] Speaker 01: Yes, ma'am. [00:01:54] Speaker 05: What about the equity interest, though? [00:01:56] Speaker 01: Oh, the equity interest? [00:01:57] Speaker 01: Well, this was a failed startup. [00:02:00] Speaker 01: And the WG group had 100% of the license. [00:02:06] Speaker 01: So the equity interest was an interest in the venture going forward. [00:02:10] Speaker 01: The equity interest was not a purchase for a license. [00:02:12] Speaker 05: But isn't all of that something that could be sorted out in the breach of contract action, as opposed to putting it as part of the injunction action? [00:02:23] Speaker 01: Well, so let me parse that for the court. [00:02:25] Speaker 01: So we're here under a slightly unusual procedural posture, because normally everything would be wrapped up in a nice bow at the end of summary judgment. [00:02:33] Speaker 01: And so the reason [00:02:35] Speaker 01: in this instance, and the court's precedent is clear and we haven't disputed anything about jurisdiction, because the predicate for the preliminary injunction was the likelihood of success on the merits for a DTSA claim. [00:02:49] Speaker 01: The DTSA claim in turn, because they're not the holders of the trade secret, depends on a license. [00:02:54] Speaker 01: The failure of the DTSA claim means the failure of the license, the failure of [00:02:58] Speaker 01: the failure of the license means the failure of the DPSA claim, then the failure of that means the dissolution of the injunction, and 1292A1 brings that up. [00:03:06] Speaker 01: So what I'd like the court to focus on in particular is the language of the contract and whether it creates a license, because I think that since that was their contention initially, the initial contention to the district court was, we will be able to prove a license. [00:03:22] Speaker 01: Now in their briefing, they actually say, we say incorrectly repeatedly, and if the court juxtaposes, [00:03:28] Speaker 01: what they say, including in their reply brief when they use an unusual bracketed D to say that the district court actually found that they had a license, when if the court compares those, that's not what the district court said. [00:03:40] Speaker 01: And I realize reviews de novo, but I do think it's very important for the court that I think the district court has a hard enough job not to have its statements misstated to this court. [00:03:50] Speaker 01: The point here is [00:03:52] Speaker 01: that they're contending in both of their briefs that the $322,000 is somehow payment for a license, and as you say, Your Honor, that this somehow gets into the equities. [00:04:04] Speaker 01: That is simply not true. [00:04:07] Speaker 02: I didn't think the $322,000 was payment. [00:04:09] Speaker 02: I thought the $500,000 was the payment. [00:04:11] Speaker 01: Well, the $500,000, Your Honor, is actually the startup funds, $170,000, which went to marketing, and $322,000, which went to WG. [00:04:20] Speaker 01: And the point is, for example, on page 11 of their reply brief to this court in the injunction appeal, [00:04:27] Speaker 01: the plaintiffs contend effectively that, like, we don't know where this money actually went. [00:04:32] Speaker 01: And so the reason I'm pointing the court to the sealed filing is that's simply an untrue statement. [00:04:38] Speaker 01: There is a line-by-line itemization of the 322. [00:04:41] Speaker 01: It was spent for setting up a lab. [00:04:44] Speaker 01: It was spent for prototype development. [00:04:46] Speaker 01: So the idea that, you know, to Judge Rollinson's question, that there was somehow an equity interest plus 322,000 and therefore [00:04:54] Speaker 01: the court can fill in missing terms in the OSC contract and divine a license. [00:05:02] Speaker 01: That 322 was never for a royalty payment. [00:05:05] Speaker 01: That 322 was never for an exclusive license. [00:05:08] Speaker 01: It's clear in the OSC itself and the reason why I mention this part of the sealed record is if all the court was looking at [00:05:16] Speaker 01: was the excerpts of record. [00:05:18] Speaker 01: You've got an email exchange between the parties. [00:05:20] Speaker 01: One says, hey, I want your financials. [00:05:21] Speaker 01: The other says, I'm giving you the financials, followed by dozens of blank pages. [00:05:26] Speaker 01: And it's only, I believe, because of those dozens of blank pages that you would actually get a reply brief that would say, we don't know where this money went, because it's just not accurate. [00:05:35] Speaker 02: sort of follow-up on what Judge Robinson was saying it just seems to me this all should be sorted out in the breach of contract action because it seems it's like a mess at this point because you made the statement that DG owned the license but now you got Dr. Martin saying well no I own it or at least part of it and you shouldn't have entered into the contract in the first place I don't know where all of a sudden Martin's in the middle of this and it just seems like the whole thing's kind of a [00:06:01] Speaker 01: Well, I appreciate the procedural posture is different and I appreciate that the and part of the reason why I think that the easiest path to a clear decision in this case is looking at [00:06:17] Speaker 01: judge, the second district judge's decision in the injunction and the summary judgment decision because the predicate for the injunction in the first place, the predicate for the DTSA claim is whether there is a license [00:06:32] Speaker 01: Right? [00:06:32] Speaker 01: And so in, and there is no specific performance on this breach of contract claim. [00:06:38] Speaker 01: By the way, but the breach of contract claim is going to trial in July, June or July. [00:06:41] Speaker 01: And on that claim, there's, you know, you didn't, you didn't do what you were supposed to have done, the parties say, in this failed startup. [00:06:49] Speaker 01: But what is clear from the contract itself, the three places where the contract mentions licensure, okay, all of them are forward looking. [00:06:59] Speaker 01: And so where I think, Judge Malloy, that we can detangle this and we can get to a decision where the court affirms and then lets the party sort out for damages the remaining claims, but doesn't have a DTSA claim where there's a contention that there could be an ability to prove [00:07:18] Speaker 01: a license based on this contract, this startup contract. [00:07:22] Speaker 01: This was a multi-phase situation, where in the first phase, the parties said, we desire to create this special purpose vehicle that will be the licensee. [00:07:33] Speaker 01: So the notion, and we're here, because as an initial matter, the plaintiffs went to the district court. [00:07:39] Speaker 01: They said, we think we'll be able to prove a likelihood of success. [00:07:42] Speaker 01: The district court granted an injunction. [00:07:43] Speaker 01: The parties then proceeded through discovery. [00:07:46] Speaker 01: They then moved for summary judgment. [00:07:47] Speaker 01: And the district court looked at it and said, well, you're moving for summary judgment on a claim for which you've got the burden of proof. [00:07:52] Speaker 01: Put all your cards on the table. [00:07:53] Speaker 01: The court looked at the cards, and the cards didn't add up to a license. [00:07:57] Speaker 01: So it was appropriate in that context in this sort of rare procedural situation where you're reviewing what would otherwise be an interlocutory summary judgment order. [00:08:06] Speaker 01: I think that the district court got it right. [00:08:09] Speaker 01: The question that was posed to the court was, do you get a license, and therefore do you continue with injunctive relief, or do you not have a license? [00:08:18] Speaker 01: And they moved for summary judgment on that, and the court said, I've looked at the evidence. [00:08:22] Speaker 01: It's all forward-looking. [00:08:24] Speaker 01: The licensee didn't exist at the time of the OSC. [00:08:29] Speaker 01: all of the material terms that the court would expect to see in an enforceable license, including at the threshold, grant language, like we desire to obtain a license, we desire to grant to you a license. [00:08:42] Speaker 01: All of those things are missing from the OSC. [00:08:44] Speaker 01: And it's clear why. [00:08:46] Speaker 01: Course of performance here, which California law says you can provisionally look at, it's the district court looked at, what was the course of performance here? [00:08:52] Speaker 01: Well, they started the first part. [00:08:54] Speaker 01: The 500,000 went in. [00:08:55] Speaker 01: 170-some thousand of it went to marketing. [00:08:58] Speaker 01: 322,000. [00:08:59] Speaker 01: As I said, in that docket 159, the sealed information, you can see line by line how that was spent. [00:09:05] Speaker 01: What was the next step? [00:09:06] Speaker 01: We're going to hire counsel, and we're going to start negotiating about a license. [00:09:10] Speaker 01: And what happened? [00:09:11] Speaker 01: There was a failure of the meeting of the minds of the parties, because one of the parties believed [00:09:17] Speaker 01: that this was going to be a narrow license for a very specific use. [00:09:21] Speaker 01: One of the other parties said, no, this is going to be a broad license of infinite duration, of infinite scope. [00:09:30] Speaker 01: And that's where everything broke down. [00:09:32] Speaker 01: Now, to, again, the last point in terms of sorting all this out, what does the OSC then mean in terms of licensure? [00:09:40] Speaker 01: And it's before the court. [00:09:42] Speaker 01: It was provisionally before the court in the injunction order that is specifically appealed by the plaintiffs. [00:09:48] Speaker 01: But the subsequent part of which the court can take judicial notice is the third district judge on the case said, you know what, I think that this gives rise to a claim whether the parties negotiated in good faith. [00:10:00] Speaker 01: And if they didn't negotiate in good faith, then there's a damages remedy. [00:10:04] Speaker 01: But there's not a specific performance remedy. [00:10:06] Speaker 01: because specific performance requires a mirroring of what the contract provides and what the relief would be. [00:10:15] Speaker 01: And this contract absolutely positively just does not provide for a license. [00:10:20] Speaker 01: And the court can't infer a license based on aspirations that the parties had to have a successful startup. [00:10:26] Speaker 01: At the end of the day, Your Honors, this was a business that failed. [00:10:31] Speaker 01: And like many startups, it failed. [00:10:33] Speaker 01: And now it's resulted in litigation. [00:10:35] Speaker 01: But what the initial agreement that the parties had was to do that first step. [00:10:40] Speaker 01: It was not for a license. [00:10:42] Speaker 05: If I may, I'd like to reserve the- [00:10:45] Speaker 05: urging us to rule in terms of the district court's decisions in this case? [00:10:50] Speaker 01: I'm urging you to rule first that the district court got it right in terms of the grant of summary judgment against the plaintiffs. [00:10:59] Speaker 01: That then necessarily means that the injunction fails. [00:11:03] Speaker 01: And because there is no DTSA claim, the intervention appeal by Dr. Martin is mooted. [00:11:08] Speaker 01: And there's nothing to be done with that, because that intervention claim [00:11:12] Speaker 01: was predicated on discovery that related to the actual license dispute. [00:11:20] Speaker 02: I'm always hesitant to not accept a concession because it makes our job easier, but if Dr. Martin's claiming he owns 30% of the license, why is he not still in the case? [00:11:31] Speaker 01: Well, I beg your pardon. [00:11:33] Speaker 01: I don't think that Dr. Martens has claimed that he owns 30% of the license. [00:11:36] Speaker 01: I want to make clear his contention was that because of a discovery order, a different iteration of this isomorphic distillation technology [00:11:47] Speaker 01: had come to the fore, so this had happened in the fall of 22. [00:11:52] Speaker 01: And at that point, he, who was a co-owner, but was not a party to this contract, thought that he needed to step in because of the difference between AE-1 and CP-3. [00:12:04] Speaker 02: Well, whether it's 30%, he claims he's a co-owner of the patent, but the contract says, was it DG or whatever it was? [00:12:14] Speaker 01: CP-3. [00:12:14] Speaker 02: They were 100% owners, so there's definitely a conflict there. [00:12:17] Speaker 01: Well, no, I respectfully disagree, Your Honor, because what's happening here is each of them are owners. [00:12:23] Speaker 01: They're co-inventors of the technology. [00:12:26] Speaker 01: And each of them has an ability to provide licensure for it. [00:12:32] Speaker 01: And so that's not a conflict. [00:12:34] Speaker 01: There's not a conflict between them and that country. [00:12:37] Speaker 05: Counsel, before us, the issue with Dr. Martin is the permissive intervention. [00:12:41] Speaker 05: That's the only issue we have. [00:12:43] Speaker 05: That is correct. [00:12:43] Speaker 05: We don't have any issue about what his ownership was. [00:12:47] Speaker 05: The only issue before us is whether or not the district court [00:12:52] Speaker 05: properly deny permissive intervention. [00:12:54] Speaker 01: That is 100% right, Your Honor. [00:12:55] Speaker 01: And the reason I'm saying, and we recognize that that's a highly deferential standard. [00:12:59] Speaker 01: We recognize it's a high hurdle for us to meet. [00:13:02] Speaker 01: And in light of the way that events have unfolded since the intervention appeal was filed and the district court ruled on the injunction, events have sort of taken over. [00:13:11] Speaker 01: And so if the court affirms on the injunction appeal, then the intervention appeal would be moot. [00:13:16] Speaker 01: And I think that's the easier path. [00:13:19] Speaker 01: So we would ask the court, [00:13:21] Speaker 01: to affirm in the injunction appeal and to dismiss as moot in the intervention appeal and I'd like to reserve the balance of my time. [00:13:46] Speaker 03: Good morning, Your Honors. [00:13:47] Speaker 03: I'm Edward Smithers of Smithers Law Firm. [00:13:50] Speaker 03: I'll be arguing Genesis' appeal from the Sue Esponte summary judgment order. [00:13:56] Speaker 03: With me today is Mary Ann O'Hara, also of Smithers Law Firm, and she'll be addressing the intervention issue. [00:14:03] Speaker 03: Also at council table is Lawrence Hinkle of the Sanders Roberts Firm, who is going to try the case with Mary Ann and I. [00:14:13] Speaker 03: The case is a bit of a mess to be honest with you. [00:14:17] Speaker 03: Um, the way the case has unfolded, we've been through three judges. [00:14:21] Speaker 03: The first judge looked at pretty much every piece of evidence. [00:14:24] Speaker 03: She issued a 21 page order finding that there was a likelihood of success on the merits that we'd be able to show an exclusive license. [00:14:34] Speaker 03: This was not some sort of rush to court situation. [00:14:38] Speaker 03: I think everyone has looked at her order. [00:14:41] Speaker 03: It is very detailed and very well thought out. [00:14:44] Speaker 05: Based on the information that was before her at that time. [00:14:49] Speaker 03: Exactly. [00:14:50] Speaker 03: And as I look at this case, if this were a situation, Your Honor, where somehow our declarations changed when they were put under scrutiny, a deposition, then I can understand how you could have a situation where an injunction would be dissolved. [00:15:06] Speaker 03: I invite the court to look at our declarations. [00:15:09] Speaker 03: I invite the court to look at our deposition. [00:15:10] Speaker 05: We have looked at the declarations. [00:15:12] Speaker 05: We have looked at the depositions. [00:15:14] Speaker 05: And there was some elucidation in the depositions that was not in the declarations. [00:15:22] Speaker 05: There was a little bit more information regarding the licensing situation. [00:15:28] Speaker 03: I could not agree more. [00:15:29] Speaker 03: The point I'm making is that in our declarations, each of our witnesses said, we understood when we were putting in this money that we were getting an exclusive license. [00:15:41] Speaker 05: When my witness- In the depositions, they said, we understood that a license would be required. [00:15:48] Speaker 05: And there was no introduction into the record of a license that had been issued. [00:15:55] Speaker 03: Well, that's a very clever turn of phrase in the respondent's brief because it doesn't have the timeline. [00:16:02] Speaker 03: When that question is being answered, as we've tried to point out in our reply brief, this is several months later. [00:16:08] Speaker 03: This is in 2020. [00:16:10] Speaker 03: So on September 5, 2019, we get a signed oil services contract. [00:16:16] Speaker 03: Seven days later, we get a signed operating agreement. [00:16:20] Speaker 05: Not a license though, that's the problem. [00:16:23] Speaker 05: Usually licenses are in writing and they're signed by both parties. [00:16:28] Speaker 05: It's either an exclusive license or a non-exclusive license and the amount of money for the license is in there. [00:16:36] Speaker 05: And so to me, that's what's missing from the record that would solidify the fact that a license was actually granted. [00:16:44] Speaker 03: If I can just go back to the timeline just for a moment, because it's very important [00:16:49] Speaker 03: I think for this court to understand [00:16:51] Speaker 03: When we're going back and forth on all these very long detailed license agreements, this is in 2020. [00:16:58] Speaker 03: This is after the fall of 2019, where we've already put in the money. [00:17:03] Speaker 03: This is after we have the signed agreement. [00:17:06] Speaker 03: And my people are business people, and they did what you should do as a good business person. [00:17:10] Speaker 03: You try to reach an agreement with the other side. [00:17:14] Speaker 03: Dr. Wiseman and his group simply were not going to perform. [00:17:17] Speaker 03: We could not push them off. [00:17:20] Speaker 03: The starting block, we have a client in Belize who wants to get going. [00:17:24] Speaker 03: And so we're willing to make concessions. [00:17:27] Speaker 03: What that doesn't mean is that somehow our initial license agreement just disappears. [00:17:33] Speaker 03: That existed at all times. [00:17:34] Speaker 05: Question, where is the initial license agreement in the record? [00:17:39] Speaker 03: It's in the oil services contract. [00:17:42] Speaker 03: And if there's any question about what that means, then we look at the extrinsic evidence. [00:17:47] Speaker 03: And that extrinsic evidence comes in to show a meaning that the language is reasonably susceptible of. [00:17:54] Speaker 04: Well, can you point me to the precise language in the contract that indicates Wiseman's intent to grant an immediate exclusive license to Genesis? [00:18:04] Speaker 03: Or just tell me what page it is. [00:18:05] Speaker 03: On pages one and two of the contract? [00:18:07] Speaker 03: Would you like the record site? [00:18:09] Speaker 03: Yeah, that'd be helpful. [00:18:10] Speaker 03: Sure. [00:18:16] Speaker 03: We're looking at 5ER-1159, 5ER-1159. [00:18:22] Speaker 03: At the bottom of the first page, it says exclusive oil field pipeline. [00:18:29] Speaker 03: And it does say would enter, but that's not unusual in contracts where people perhaps don't have the level of lawyering that we're finding with us here today. [00:18:40] Speaker 03: In retrospect, yes, you could have said here is the exact license, but the reality is our folks certainly thought they were getting a license. [00:18:48] Speaker 03: If they weren't getting a license, I have to ask the panel, what were they getting? [00:18:52] Speaker 03: A seat at the table to negotiate some unknown license? [00:18:56] Speaker 05: We don't have to answer that question. [00:18:59] Speaker 05: But the deposition testimony seemed to reflect that. [00:19:04] Speaker 05: the part that your clients knew that they would have to get a license, and they didn't say that the license was in the operating agreement. [00:19:14] Speaker 03: But they did, Your Honor. [00:19:15] Speaker 03: I would just again point to the excerpts from the deposition and the declarations as part of our appellant's opening brief, and then we reiterate them in our reply brief. [00:19:27] Speaker 03: Our corporate designee, Mr. Jimmy Smith, who's with us here today, he testified, I think, four or five separate times, yes, it's an exclusive license in the oil services contract. [00:19:39] Speaker 03: He's our corporate designee saying that. [00:19:42] Speaker 03: The deposition testimony they rely on is from Susan Adelman, who's talking about the 2020 efforts to put this deal back together. [00:19:50] Speaker 03: It's not referenced in their brief that that's in 2020, but it's undisputed. [00:19:53] Speaker 05: But if the district court disagreed that there was a licensing agreement [00:19:58] Speaker 05: in the oil services agreement, do you lose? [00:20:05] Speaker 03: I think we get to a jury on that to be perfectly candid with you, Your Honor. [00:20:10] Speaker 05: You think that's a material issue of fact? [00:20:12] Speaker 03: It certainly is when the parties dispute what the language means and we have admissions by the other side that they considered it to be a license. [00:20:20] Speaker 03: I did cite those in our brief. [00:20:23] Speaker 03: that where we have Mr. Wiseman, excuse me, Dr. Wiseman talking about how he views the license. [00:20:31] Speaker 03: This is at 6ER 1190 to 91. [00:20:35] Speaker 03: It's a December 9th email. [00:20:39] Speaker 03: And I try not to read into the record too much at oral argument. [00:20:42] Speaker 02: Well, let me ask you this. [00:20:44] Speaker 02: So what you're arguing you're getting in this, [00:20:49] Speaker 02: is for $500,000, you'd get 57% of the special purpose vehicle, and the license OR would get the other 42%, roughly, in return for the license. [00:21:07] Speaker 02: Is that what the agreement would be? [00:21:09] Speaker 02: So for $500,000, you got 58% of the license. [00:21:15] Speaker 03: The defendants get 42.5% and that's how they're remunerated by licensing the technology. [00:21:21] Speaker 02: Because under your theory, there's no royalty or any payment other than that. [00:21:26] Speaker 02: Is that your theory of the case? [00:21:28] Speaker 03: Right. [00:21:28] Speaker 03: But when you say payment other than that, if this deal in Belize is profitable, that's a huge windfall for the defendants because they get 42.5% of the profits. [00:21:38] Speaker 02: I understand that. [00:21:39] Speaker 02: So they get 42% of the profits if it's a successful venture. [00:21:43] Speaker 02: You get 58%. [00:21:45] Speaker 02: And so you're valuing the license, so to speak, at about, what's 40%, about $200,000. [00:21:57] Speaker 02: Because they're getting. [00:21:59] Speaker 03: I'm sorry, Your Honor. [00:22:01] Speaker 02: I know. [00:22:01] Speaker 02: I'm not doing the math right. [00:22:03] Speaker 02: But for $500,000, you're getting 58% of the profit. [00:22:06] Speaker 02: And for the license, they're getting 42% of the profits. [00:22:10] Speaker 03: Yes, the math is right, but you're using the wrong number to divide by. [00:22:14] Speaker 03: The number to divide by is if we make a $10 million profit on this deal, they get a 4.25 profit million. [00:22:23] Speaker 03: So we don't take 42.5% of the $500,000. [00:22:27] Speaker 03: And that is a very good point, because what they raise in their brief is that the $322,000 was not for the license. [00:22:36] Speaker 03: That's not license consideration. [00:22:39] Speaker 03: If I accept that as true, then what is the purpose of the 42.5% equity? [00:22:47] Speaker 03: It has to be for the license. [00:22:48] Speaker 03: This would have been a deal where everyone had the potential to make a great deal of money. [00:22:53] Speaker 05: Now, so do you disavow the deposition testimony of Ms. [00:22:57] Speaker 05: Adelman, who said that they were supposed to pull together a license agreement that was called for in the contract? [00:23:03] Speaker 05: Do you disavow that testimony? [00:23:05] Speaker 03: I do not disavow it. [00:23:06] Speaker 03: I put it in context, which is in 2020. [00:23:10] Speaker 03: This is when we know that we've unfortunately got into bed with someone who's not going to do what they said they were going to do. [00:23:16] Speaker 03: And we're trying to reach some sort of agreement because we have this deal in Belize, which can be extremely profitable. [00:23:23] Speaker 03: So I don't disavow it at all. [00:23:25] Speaker 03: And that's true in 2020. [00:23:27] Speaker 03: It doesn't mean that somehow [00:23:29] Speaker 03: We reward him for not performing the oil services contract by saying, oh, you get a free square. [00:23:35] Speaker 03: We're not going to hold you to the oil services contract. [00:23:38] Speaker 03: When it turned out it was impossible. [00:23:39] Speaker 05: Well, the oil services contract, the breach of contract action is still viable, correct? [00:23:46] Speaker 03: It is, but it's been greatly curtailed by our third judge who now looks at this case along with Judge Sykes as simply being in agreement to negotiate in good faith and use your best efforts. [00:24:00] Speaker 03: So that's a far cry from suing for breach of a license. [00:24:04] Speaker 05: Thank you, counsel. [00:24:06] Speaker 03: Thank you so much, your honor. [00:24:21] Speaker 00: Good morning, Your Honors. [00:24:23] Speaker 00: I'm Marianne O'Hara, and I'm here today asking the court to uphold the denial of the permissive intervention motion filed by Dr. Martin. [00:24:35] Speaker 00: In this appeal, Dr. Martin relies on several arguments not made below to attempt to establish an abuse of discretion by the district court. [00:24:45] Speaker 00: For instance, [00:24:46] Speaker 00: Dr. Martin told this court a different story about intervention than he told the district court. [00:24:52] Speaker 00: In his opening brief, he claimed that the only reason he was intervening was because he was concerned about the October 2022 discovery order, compelling discovery of AE1. [00:25:05] Speaker 00: In contrast, he told the district court repeatedly he was intervening for the limited purpose of overturning the injunction order entered in March 2021. [00:25:17] Speaker 00: which he claimed was trampling his rights to both CP3 and AE1. [00:25:24] Speaker 00: In his reply brief, Dr. Barton concedes that he was concerned about CP3, but claims that AE1 was the major reason for his intervention. [00:25:34] Speaker 00: This argument is contrary to the evidence and the arguments presented to the district court. [00:25:42] Speaker 00: When he filed his ex-party application for intervention, [00:25:46] Speaker 00: He asked the district court to overturn both the discovery order and the injunction. [00:25:53] Speaker 00: He did not appeal the denial of that request. [00:25:58] Speaker 00: When he followed up with his notice motion, Dr. Martin abandoned his request to have the court overturn the discovery order. [00:26:07] Speaker 00: Because he repeatedly told the court that the only reason for the injunction, for the intervention was to overturn the injunction, [00:26:16] Speaker 00: It was reasonable and appropriate for the court to use the date the injunction was entered as the starting point for its analysis. [00:26:25] Speaker 00: The court assumed without deciding that Dr. Martin himself identified the earliest point at which he could or ought to have intervened. [00:26:35] Speaker 00: The date the injunction was entered because of the arguments that Dr. Martin made that he was harmed by that. [00:26:41] Speaker 00: If in fact Dr. Martin was the owner of CP3, as he now claims he is, he should have intervened immediately upon learning of the lawsuit because the outcome of the lawsuit could negatively impact those claims. [00:26:56] Speaker 00: He failed to provide any explanation to the district court for his delay in intervening after the lawsuit was filed, let alone after the injunction was entered. [00:27:08] Speaker 00: Another new claim that Dr. Martin is making on appeal is that his interests were not adequately represented by the existing parties. [00:27:17] Speaker 00: Genesis argued below in opposing the intervention that his interests were adequately represented. [00:27:24] Speaker 00: Dr. Martin never provided any evidence or made any argument to the district court to the contrary. [00:27:31] Speaker 00: The fact that Dr. Martin and the Wiseman defendants are currently represented by the same counsel [00:27:38] Speaker 00: counsel undercuts this new argument. [00:27:43] Speaker 00: Another new argument on appeal is that there is a change in circumstances justifying Dr. Martin's delay in intervention. [00:27:54] Speaker 00: Again, this is an argument that was not made before the district court. [00:27:59] Speaker 00: Dr. Martin concedes he did not use the words change in circumstances. [00:28:03] Speaker 00: He did not cite the Smith and Oregon cases that he relies on now to the district court. [00:28:09] Speaker 00: He withdrew his request or abandoned his request to have the court overturn the discovery order. [00:28:17] Speaker 00: So it's difficult to figure out how the district court should have known that Dr. Martin was conceding that this was a change in circumstances that should be used as the starting point for the analysis. [00:28:34] Speaker 00: And finally, the court properly found that intervention at this stage of the litigation would further delay the resolution of this protracted case. [00:28:45] Speaker 00: The court found prejudice, undue prejudice to the existing parties. [00:28:50] Speaker 00: Genesis would be prejudiced by having to defend these new ownership claims without having the opportunity [00:28:55] Speaker 00: to conduct discovery on them. [00:28:57] Speaker 00: Discovery, including expert discovery, has already been completed. [00:29:02] Speaker 00: And Genesis does not know really the extent of Dr. Martin's claims and defenses that he would be asserting as a full party in the litigation, because he didn't file a separate pleading. [00:29:14] Speaker 00: So Genesis respectfully requests that this court affirm the order denying permissive intervention. [00:29:22] Speaker 05: Thank you, counsel. [00:29:23] Speaker 05: Thank you. [00:29:29] Speaker 01: Two points I'd like to make in rebuttal. [00:29:32] Speaker 01: First of all, California law, unusual among contract law in other places, has a two-step process for contract interpretation. [00:29:43] Speaker 01: Certainly we look at the words of the contract first, then we look at specific types of parole evidence. [00:29:48] Speaker 01: But we never look at the subjective beliefs of the parties unless you get to the point of declaring an actual contract ambiguity. [00:29:54] Speaker 01: So, when my learned opponent says, let's look at what our, when we're in litigation, the subjective beliefs that we had about the contract, that's evidence that California law says you should never consider, again, absent a full trial on what the contract means. [00:30:09] Speaker 01: What should you consider? [00:30:11] Speaker 01: Contemporaneous evidence before a dispute arose. [00:30:17] Speaker 01: They signed the oil services contract. [00:30:19] Speaker 01: And then they started negotiating a license, which is exactly what on page 1159 of the Exhibits of Records was contemplated by the contract. [00:30:28] Speaker 01: It wasn't a license. [00:30:29] Speaker 01: In fact, I point the court to the 1160 at the top of 1160. [00:30:36] Speaker 01: One of the other things it says is the parties, so they desire to start a new SPV in Delaware that will obtain a licensing contract. [00:30:46] Speaker 01: In the OSC itself, it calls the licensing contract a different document than the OSC. [00:30:51] Speaker 01: That's what they then went and negotiated. [00:30:53] Speaker 04: Right, but then on 1191, there's this statement by Wiseman that the technology is a process that has been licensed. [00:31:01] Speaker 01: That was in marketing materials, Your Honor, and in a startup venture, it is absolutely true that what you say to third parties is not necessarily what's actually [00:31:09] Speaker 01: the reality behind the scenes when you're negotiating. [00:31:12] Speaker 01: So that was not an admission by him that there was a license. [00:31:15] Speaker 01: He was trying to get investors interested in. [00:31:17] Speaker 01: So those were marketing emails. [00:31:18] Speaker 01: Those were not admissions. [00:31:19] Speaker 01: In contrast, Ms. [00:31:21] Speaker 01: Adelman's deposition testimony is a statement against interest, and that is an admission. [00:31:25] Speaker 01: And as Judge Robinson said, that's a statement that the parties knew [00:31:30] Speaker 01: This whole notion that the equity interest was a license, that the 322 was a license, these are all litigation positions that are inconsistent with the plain language of the contract. [00:31:41] Speaker 01: We accordingly, as we said, urge the court to affirm the order in the injunction appeal and to dismiss the intervention appeal as moved. [00:31:51] Speaker 01: I thank the court for its time and consideration. [00:31:53] Speaker 05: Thank you, counsel. [00:31:54] Speaker 05: Thank you to all counsel for your helpful arguments in this challenging case. [00:31:59] Speaker 05: That concludes our calendar for the morning. [00:32:01] Speaker 05: We are in recess until 9.30 a.m. [00:32:04] Speaker 05: tomorrow morning. [00:32:08] Speaker 00: All rise. [00:32:25] Speaker 00: This court for this session stands adjourned.