[00:00:00] Speaker 04: All right, if you're ready, we're ready. [00:00:03] Speaker 00: May it please the court, William Adams for Proofpoint and Cloudmark. [00:00:08] Speaker 00: I'd like to reserve two minutes for rebuttal. [00:00:11] Speaker 00: The district court erred in denying plaintiffs a jury trial on their request for exemplary damages under the Defend Trade Secrets Act. [00:00:18] Speaker 00: The district court kept that issue for itself and sitting as the finder of fact, opted to award zero exemplary damages. [00:00:26] Speaker 00: That was wrong. [00:00:27] Speaker 00: The Seventh Amendment, in light of historical and common law practice, requires a jury trial on DTSA exemplary damages, and the DTSA itself is sufficiently expansive to permit a jury trial. [00:00:41] Speaker 00: I'd like to start with the constitutional issue. [00:00:43] Speaker 04: Well, let's also, when you cover that, as I think that there's a connection between the Federal Patent Act, between the USTA and the DTSA. [00:01:03] Speaker 04: So, as exemplary damages are left for judicial termination under the Federal Patent [00:01:09] Speaker 04: which served as a model for the Uniform Trade Secrets Act, which in turn served as a model for the DTSA, why shouldn't exemplary damages under the DTSA be left to the judge to decide? [00:01:26] Speaker 00: Thank you, Your Honor. [00:01:26] Speaker 00: We think there are distinct issues, and nothing you do here with respect to the DTSA will have any implication with respect to the Patent Act. [00:01:34] Speaker 00: It's a different statute. [00:01:35] Speaker 00: with different language that expressly distinguishes between the judge and the jury, and it has a different remedy, enhanced damages, not exemplary damages, that has a different history. [00:01:47] Speaker 00: The Supreme Court in Halo, which would explain now that presently enhanced damages have a strong punitive component. [00:01:55] Speaker 00: But earlier iterations of the Padden Act, there was a strong compensatory component. [00:02:01] Speaker 00: Halo explains this history. [00:02:03] Speaker 00: after Section 285 of the Patent Act was adopted in the 1950s, that essentially eliminated the compensatory element and made 284 more punitive. [00:02:14] Speaker 00: And so there's a different history that a court would need to look for to determine whether the enhanced damages are equitable or legal and what the nature is. [00:02:24] Speaker 04: Well, we have to interpret the word court in the statute. [00:02:28] Speaker 00: Correct. [00:02:29] Speaker 00: We think that you do have to interpret the word court. [00:02:31] Speaker 04: And they didn't say jury trial there. [00:02:32] Speaker 00: They did not. [00:02:34] Speaker 04: I think everyone takes it safe to say we all take the Seventh Amendment quite seriously. [00:02:40] Speaker 04: You're right, Your Honor. [00:02:43] Speaker 00: But just to be clear, no matter what, you need to reach the Seventh Amendment issue here. [00:02:49] Speaker 00: You have to address the statute and the statute. [00:02:52] Speaker 00: I understand that. [00:02:53] Speaker 00: And we think that the DTSA is written broadly enough [00:02:57] Speaker 00: to include a jury trial right where it's required under the Seventh Amendment. [00:03:04] Speaker 04: Do you concede under the statutory language that doesn't entitle you to a jury trial? [00:03:09] Speaker 00: No, we do not concede. [00:03:11] Speaker 00: We don't think you need to invalidate the DTSA at all to reverse here. [00:03:15] Speaker 00: The word court in Section 1836B3 [00:03:20] Speaker 00: is sufficiently broad to include a jury where required by the seventh amendment. [00:03:26] Speaker 04: I stepped on both of my colleagues here. [00:03:30] Speaker 02: I'd like to ask you about that, because the jury found zero in actual losses. [00:03:41] Speaker 02: And the award of about $13.5 million was for unjust enrichment only. [00:03:49] Speaker 02: And so regardless of what should be the case when the jury awards actual damages, whether punitive damages or exemplary damages would go to a jury in that instance, why would the jury be entitled under the Second Amendment to look at exemplary damages for an equitable remedy? [00:04:20] Speaker 00: Your Honor, the jury trial right attaches to exemplary damages, which are legal remedies, regardless of the nature of the underlying compensatory relief. [00:04:31] Speaker 02: That seems to be different from what Motorola said, at least. [00:04:38] Speaker 00: Respectfully, I don't think so, Your Honor. [00:04:40] Speaker 00: Here's what happened in Motorola. [00:04:42] Speaker 00: The judge in Motorola initially upheld a jury verdict [00:04:46] Speaker 00: on exemplary damages. [00:04:47] Speaker 00: That's at 495. [00:04:47] Speaker 02: That's right, counsel, but there were both kinds of damages in that case. [00:04:52] Speaker 02: There was unjust enrichment, but there also were legal actual loss damages in that case. [00:04:59] Speaker 02: And the ultimate result was that the judge excised the exemplary damages that related to unjust enrichment, because that was a question for the court. [00:05:12] Speaker 02: and allowed to stand the exemplary damages that related to the legal remedies. [00:05:18] Speaker 02: And so why isn't that the right answer? [00:05:21] Speaker 00: I disagree with what the district court did in Motorola. [00:05:24] Speaker 00: So the district court first upheld the jury verdict on exemplary damages. [00:05:28] Speaker 00: And then the judge later reduced the advisory disgorgement award. [00:05:33] Speaker 00: And it reduced that. [00:05:34] Speaker 02: Why isn't it advisory? [00:05:36] Speaker 02: So I guess that's my question to you. [00:05:39] Speaker 02: Unjust enrichment is an equitable remedy. [00:05:42] Speaker 02: And ordinarily, the Seventh Amendment, that right does not attach to equity as distinct from legal damages. [00:05:53] Speaker 02: And so I guess I'm trying to figure out why that isn't the answer here where the jury basically said we're granting an equitable remedy. [00:06:03] Speaker 00: So the jury did award unjust enrichment damages, waived any argument. [00:06:08] Speaker 03: If you concede those are equitable, correct? [00:06:11] Speaker 03: It's an equitable remedy, unjust enrichment damages. [00:06:13] Speaker 00: The adjustment enrichment damages here were awarded, were an equitable remedy as to which they waived [00:06:18] Speaker 00: any argument that there was no jury trial, right? [00:06:20] Speaker 00: The jury verdict here was not advisory. [00:06:23] Speaker 00: They waived any argument that it was. [00:06:24] Speaker 02: I understand that. [00:06:25] Speaker 02: I understand that. [00:06:26] Speaker 02: But regardless of whether they waived an argument that they have that the jury shouldn't have been allowed to do it at all, [00:06:35] Speaker 02: That doesn't translate necessarily into the idea that because they waived it as to the damages, then the Seventh Amendment suddenly applies. [00:06:47] Speaker 02: That's a separate question. [00:06:49] Speaker 02: But I don't understand why it applies to an equitable remedy. [00:06:53] Speaker 00: It's not an equitable remedy, Your Honor. [00:06:55] Speaker 00: The Seventh Amendment applies to exemplary damages, which are a legal remedy. [00:06:59] Speaker 00: And I'm not aware of any decision which has held that either punitive damages [00:07:04] Speaker 00: more exemplary damages that are used interchangeably in the case law became equitable because the compensatory damages award was only on Justin Richmond. [00:07:13] Speaker 00: I just want to be very clear in Motorola, the district court did not treat the exemplary damages verdict as advisory. [00:07:21] Speaker 00: It reduced them as a matter of law because they exceeded the statutory cap once it reduced [00:07:27] Speaker 00: the disgorgement award. [00:07:28] Speaker 00: So there was no Seventh Amendment issue addressed by the district court in Motorola or by the Seventh Circuit in Motorola. [00:07:34] Speaker 00: And in fact, there was no argument made in Motorola [00:07:37] Speaker 00: that the exemplary damages were an equitable remedy. [00:07:40] Speaker 03: But how have you been prejudiced if you got zero actual damages and we said, okay, the district court needs to conduct a jury trial and the jury can determine to give you multiples of zero, but zero times a thousand is still zero. [00:07:53] Speaker 03: So where are you prejudiced here? [00:07:55] Speaker 00: It's not zero, Your Honor. [00:07:57] Speaker 00: It's $13.5 million in unjust enrichment damages. [00:08:00] Speaker 00: Those are the compensatory damages. [00:08:01] Speaker 00: And as a matter of statute, [00:08:03] Speaker 00: The exemplary damages are available up to two times the amount of compensatory damages, whether they're awarded as actual damages or whether they're awarded as unjust enrichment. [00:08:11] Speaker 00: So the statutory cap here is $27 million, 13.5 times 2. [00:08:17] Speaker 00: That is the prejudice. [00:08:18] Speaker 00: And we think a reasonable jury faced with this determination of willful and malicious infringement on a wide scale for which there was no remorse could reasonably conclude that that Vade had to pay punitive damages of up to $27 million. [00:08:35] Speaker 00: And so there's no harmless error with respect to that issue. [00:08:40] Speaker 00: And also, just to be clear, my friends on the other side didn't press that as a reason. [00:08:45] Speaker 00: And I'm not aware of any circumstance in which what has otherwise been held and treated as a legal remedy, punitive damages for the last two centuries are converted to an equitable remedy or otherwise not available because the underlying compensatory damages. [00:09:01] Speaker 03: But if you can see punitive damages are a legal remedy, then how does an equitable remedy create a legal remedy? [00:09:08] Speaker 00: Under the Supreme Court has held that you are looking at the punitive and legal damages that are based upon factors such as reprehensibility, duration of the misconduct, consciousness of guilt, need to deter. [00:09:24] Speaker 00: These are all fact-specific determinations that are well within [00:09:29] Speaker 00: the core competency of a jury. [00:09:31] Speaker 00: A jury is well suited to convey its moral disapproval of the conduct by the defendant, regardless of whether that conduct ultimately resulted in actual loss or was just an infringer's property. [00:09:45] Speaker 04: Well, they did say something, and I know this sort of goes to the adverse [00:09:50] Speaker 04: The instruction that you claimed was not given, and that was error, but is it, is the Mr. Lamour, or Lamour, what's his name? [00:10:02] Speaker 00: Lamoury. [00:10:03] Speaker 00: Lamoury. [00:10:04] Speaker 00: Lamoury. [00:10:05] Speaker 00: Lamoury. [00:10:06] Speaker 04: Okay. [00:10:07] Speaker 04: They made a finding as to Mr. Lamoury, correct? [00:10:11] Speaker 04: And what was that finding? [00:10:12] Speaker 00: The jury found that his misappropriation was not willful and malicious. [00:10:16] Speaker 00: Okay, so you lost on spoliation on that, correct? [00:10:33] Speaker 04: an adverse interest instruction with respect to- So does the finding that they made on Mr. LeMauri, does that tell us anything about what this jury would have done about exemplary damages? [00:10:48] Speaker 00: It does not, Your Honor, because the exemplary damages here would be against VAID, and the conduct that VAID was found to engage in and was alleged to have engaged in extended beyond [00:11:01] Speaker 00: Mr. Le Marais. [00:11:02] Speaker 00: The jury very well may have concluded that he did not act maliciously. [00:11:07] Speaker 00: His conduct was intentional and willful, but was not with an intent to harm my client. [00:11:13] Speaker 04: What was your argument for compensatory damages that got zero? [00:11:17] Speaker 00: It was a price erosion theory. [00:11:20] Speaker 00: Purely a price erosion theory. [00:11:22] Speaker 04: Judge Draper, I'm sorry. [00:11:24] Speaker 02: Yeah, are you aware of any Ninth Circuit case or Supreme Court case? [00:11:30] Speaker 02: that holds that an award of unjust enrichment gives rise to a legal remedy of exemplary or punitive damages. [00:11:47] Speaker 00: I'm not, Your Honor, I'm also not aware of any case distinguishing between treating the legal nature of exemplary damages as dependent upon the underlying relief. [00:11:58] Speaker 00: And I would direct, in Motorola there is a discussion, and Motorola obviously does not address this issue. [00:12:03] Speaker 00: It says we don't need to decide this very complicated issue of due process as to whether you could award punitive damages based upon an unjust enrichment verdict because there was sort of an alternative finding of actual loss here. [00:12:15] Speaker 00: I respectfully suggest [00:12:17] Speaker 00: Even though the jury found zero dollars in price erosion, that doesn't mean there was no harm to our client. [00:12:25] Speaker 00: BMW versus Gore considers, as part of the due process analysis, the harm to the plaintiff. [00:12:32] Speaker 00: And certainly there's harm here to proof point, because it invades our direct competitors. [00:12:38] Speaker 00: So in the marketplace for the same customers. [00:12:40] Speaker 00: And so it's unjust enrichment. [00:12:41] Speaker 00: Its profits could necessarily be taking away profits, could be assumed to be taking away profits from proof point. [00:12:47] Speaker 00: And in fact, given the jury's verdict of willful and malicious misconduct, it found that Vade acted intentionally with intent to harm, to harm proof point. [00:12:59] Speaker 00: So I don't think on this record that the court could conclude that the error is harmless here. [00:13:05] Speaker 00: based upon some sort of absence of actual harm to the plaintiffs. [00:13:12] Speaker 04: So how much time did you say you wanted to save for rebuttal? [00:13:15] Speaker 00: I just saved two minutes. [00:13:16] Speaker 04: Okay. [00:13:17] Speaker 04: Let me find out first if my colleagues have any questions right now. [00:13:21] Speaker 03: No, thank you. [00:13:21] Speaker 04: Okay, so we'll give you two minutes on rebuttal. [00:13:23] Speaker 03: Thank you. [00:13:24] Speaker 04: Thank you. [00:13:38] Speaker 04: Good morning. [00:13:39] Speaker 01: Good morning, Your Honors. [00:13:41] Speaker 01: May it please the Court? [00:13:42] Speaker 01: Jeff Homrig for Vade. [00:13:45] Speaker 01: Because my friend appears to have conceded the statutory challenge, I would like to start with the Seventh Amendment question. [00:13:52] Speaker 01: The position they lay out in this case would upend 200 years of patent practice in which judges have determined [00:14:05] Speaker 01: enhanced damages. [00:14:08] Speaker 03: You can see it was an error for the district court not to do the constitutional analysis. [00:14:14] Speaker 01: This was raised in such a, I would say no your honor. [00:14:18] Speaker 03: Why? [00:14:19] Speaker 01: Because it was raised in such a tangential short way in the context of multiple discussions with the district court that frankly most of the discussion at the district court level focused simply on the statute and what it required. [00:14:34] Speaker 01: So while they did, I think, technically enough to preserve the issue, this is not an issue that they pressed with the district court in any meaningful way. [00:14:45] Speaker 01: And so the district court focused on the arguments that they did press, which was the statutory question. [00:14:52] Speaker 04: So you didn't appeal this. [00:14:55] Speaker 04: That's correct. [00:14:56] Speaker 04: If we affirm the district court, you're on the hook for a lot of money anyway. [00:15:01] Speaker 01: We are, and the client has already paid. [00:15:03] Speaker 01: So when this judgment came out, they promptly paid it, and it took its medicine and thinks the district court came out in the correct way. [00:15:15] Speaker 04: Well, if they do have a right under the Seventh Amendment, hypothetically, I know you're not conceding that point, would there be any way to make a harmless error analysis that a jury didn't happen here? [00:15:30] Speaker 01: I think there is, Your Honor, and that's because the evidence against vade on willfulness was so thin. [00:15:36] Speaker 01: So most of the presentation of evidence was about Mr. Lemarié and his conduct, the alleged spoliation, his copying of code from one to the next. [00:15:48] Speaker 01: Their argument was that he did it alone in his garage and nobody knew. [00:15:51] Speaker 01: And so almost all of the evidence focused on his conduct related to a particular spearfishing module. [00:15:58] Speaker 01: What the jury found was that that was not willful. [00:16:02] Speaker 01: And it doesn't suddenly become willful when it rolls up under respondeat superior to Bade. [00:16:07] Speaker 01: And so the evidence they put in against Bade, as the district court pointed out in its decision, was very, very thin. [00:16:16] Speaker 02: That seems to me to be a very hard argument if there is a right to a jury trial on exemplary damages. [00:16:27] Speaker 02: So I'd like your comments on when exemplary or punitive damages are protected as jury fodder under the Seventh Amendment, and when, if ever, they are not. [00:16:45] Speaker 01: In this context, Your Honor, in the context of trade secret cases, [00:16:50] Speaker 01: There is no right to a jury trial. [00:16:53] Speaker 02: Well, let's say I disagree with you on the interpretation of the statute, because under this statute, a jury does decide compensatory damages, whereas that's different than the patent situation in which compensatory damages are for the judge. [00:17:19] Speaker 02: If they had awarded the 13 and a half as actual damages here, and I know they didn't, but why wouldn't they have had a right to try the exemplary damages question before a jury? [00:17:36] Speaker 01: So, Your Honor, in the patent context, juries do decide compensatory damages, but judges decide enhanced damages. [00:17:46] Speaker 01: It's exactly the same here under the statute, right? [00:17:49] Speaker 01: So when we look at the statute, the work being done to determine who decides the particular remedy is not done by the word court. [00:17:58] Speaker 01: It's done by the remedy itself, right? [00:18:00] Speaker 01: So we know from the statute that a court decides an injunction, that's subsection A. We know that a judge decides an injunction, that's subsection A. [00:18:11] Speaker 01: Subsection B refers to actual damages and unjust enrichment. [00:18:16] Speaker 01: We know that actual damages should be decided by the jury. [00:18:20] Speaker 03: But there's no new subject, right? [00:18:22] Speaker 03: The statute says a court may grant an injunction, award damages for actual loss, or damages for any unjust enrichment. [00:18:31] Speaker 01: That's correct, Your Honor. [00:18:33] Speaker 02: So it isn't always the judge. [00:18:35] Speaker 03: It's ambiguous, right? [00:18:37] Speaker 03: Because court defines injunction, which we would all agree a judge does, but awarding actual lost damages, that's what a jury does. [00:18:45] Speaker 03: Unjust and Richmond, or I guess, Unjust and Richmond, I guess that would be an equitable remedy. [00:18:48] Speaker 03: But the actual lost damages, that's what a jury does, correct? [00:18:52] Speaker 01: Actual loss damages is done by a jury. [00:18:55] Speaker 01: We submit, Your Honor, it's not, if you read the statute, the whole section in context, we submit that it is unambiguous. [00:19:03] Speaker 02: Well, let's say we disagree with you. [00:19:05] Speaker 02: It's very interesting to me that you and your friend on the other side are taking these extreme positions. [00:19:12] Speaker 02: All forms of exemplary damages are for the jury. [00:19:16] Speaker 02: No form of exemplary damages are for the jury. [00:19:19] Speaker 02: And it seems to me that the right answer may lie in the middle, and I don't really understand why it wouldn't, so that if there is actual laws and legal remedy, the Seventh Amendment would be preserved because it's essentially a suit at law. [00:19:39] Speaker 02: But for equitable remedies, it wouldn't apply. [00:19:43] Speaker 02: And I don't understand why that construct isn't correct, and neither one of you seems to agree with it, but I don't really know why. [00:19:52] Speaker 01: Well, Your Honor, let me start with your question that you asked my friend and that you posed here on exemplary damages flowing from an unjust enrichment award. [00:20:06] Speaker 01: We submit there is nothing, and they pointed to no example of a court in equity calling in a jury to award punitive damages, which is what they would have. [00:20:16] Speaker 04: But you can get punitive or exemplary damages based on unjust enrichment, correct? [00:20:22] Speaker 01: Under the statute, yes. [00:20:23] Speaker 04: You don't dispute that. [00:20:25] Speaker 04: No. [00:20:25] Speaker 04: And so if they hypothetically had just sought unjust enrichment and exemplary damages, your argument would be that would be a straight- Judge issue. [00:20:37] Speaker 04: Court trial. [00:20:38] Speaker 04: Correct. [00:20:39] Speaker 04: Judge court trial. [00:20:40] Speaker 01: That's correct, Your Honor. [00:20:42] Speaker 04: But because they sought actual damages and injunctive relief, you do not dispute the fact that that put it in jury trial land. [00:20:51] Speaker 01: I do I do not dispute that the liability and the compensatory damages to actual damages had to be tried to the jury. [00:20:59] Speaker 01: But because of the lineage of this language for exemplary damages, which comes from the UTSA, as your honor pointed out, and that comes [00:21:08] Speaker 01: Uh, as, as the comments to the UTSA show that comes from patent law, they cite to 35 USC section 284. [00:21:17] Speaker 01: And that's important because juries have never, never decided enhanced damages in patent cases, not before the constitution, not after the constitution. [00:21:29] Speaker 04: So what is your explanation, and I asked it of your friend on the other side, why the jury came back with zero compensatory but significant unjust enrichment? [00:21:46] Speaker 04: What does that mean in the overall scheme? [00:21:51] Speaker 04: Well, if hypothetically we decided that the statute was ambiguous and maybe they should have gotten a jury trial, could that be subject to harmless error as opposed to if it's a Seventh Amendment jury trial, right? [00:22:06] Speaker 04: Harmless error becomes more difficult. [00:22:11] Speaker 04: How do we look at all of that? [00:22:12] Speaker 04: What happened here? [00:22:14] Speaker 01: So here's what happened. [00:22:15] Speaker 01: They had different theories of recovery. [00:22:18] Speaker 01: One theory of recovery, as my friend said, [00:22:20] Speaker 01: had to do with price erosion for a particular sale that Proofpoint was trying to make. [00:22:27] Speaker 01: And that was their only actual damages claim. [00:22:30] Speaker 01: The jury rejected that and gave them zero. [00:22:33] Speaker 01: What they then did is said for all of Vade's sales, they tried to claim or they did claim a portion of those sales saying that those arose out of the misappropriation and that was the unjust enrichment theory. [00:22:44] Speaker 01: And it was on that basis [00:22:46] Speaker 01: that the jury awarded $13.5 million. [00:22:50] Speaker 01: And so there were just completely different factual issues presented to the jury on the different forms of recovery. [00:23:01] Speaker 01: Okay. [00:23:01] Speaker 01: And so at the end of the day, what we would say is whether we look at it simply based on what would be retried on remand, an exemplary damages award flowing from an unjust enrichment award, which is [00:23:16] Speaker 01: which is equitable as they concede, that doesn't require a jury trial. [00:23:23] Speaker 01: And in fact, because of its lineage back to the patent statute and the long practice of judges deciding exemplary damages in that context, and the fact that juries have never [00:23:39] Speaker 01: decided that issue in the patent context. [00:23:42] Speaker 01: We submit that under the DTSA, juries don't have to. [00:23:47] Speaker 01: There is no seventh amendment right to a jury trial on exemplary damages, regardless of whether it comes from an actual damages claim or an unjust enrichment claim. [00:23:56] Speaker 03: You can see that the DTSA exemplary damages are punitive damages? [00:24:01] Speaker 01: They are punitive in purpose. [00:24:04] Speaker 03: Why do we have to look at the patent act? [00:24:06] Speaker 03: Why don't we just look at the history that punitive damages are legal remedies? [00:24:14] Speaker 01: We have to look at the Patent Act because simply focusing on the fact that they're intended to be punitive doesn't really answer the question. [00:24:21] Speaker 03: But punitive damages precede the Patent Act. [00:24:23] Speaker 03: That's why I don't understand why you're saying, just look at the Patent Act at punitive damages that long preceded the Patent Act. [00:24:32] Speaker 01: So the Supreme Court tells us to look at the remedy for the cause of action. [00:24:37] Speaker 01: And it's true that punitive damages in some forms of causes of action were decided by juries before the Constitution. [00:24:47] Speaker 01: But the fact is, is the lineage of the exemplary damages provision in the DTSA is different. [00:24:52] Speaker 01: It doesn't trace back to those cases and those causes of action. [00:24:56] Speaker 01: It traces back to the Patent Act. [00:24:58] Speaker 01: And in the patent context, [00:25:01] Speaker 01: Juries have never decided this issue. [00:25:03] Speaker 01: And that's if we look at the Markman case where it walks through sort of the analysis of the issue being decided. [00:25:09] Speaker 01: It looks at the issue, was the issue decided in this cause of action by juries? [00:25:16] Speaker 01: And so if we follow that analysis, what we see is it just traces, it just has a different origin. [00:25:21] Speaker 03: So it's- But clearly the Patent Act didn't create punitive damages, right? [00:25:25] Speaker 01: The Patent Act, actually the Patent Act of [00:25:29] Speaker 01: 1793 did right so so what it did you're saying there were no punitive damages before 1793 actually before 1793 there were some punitive damages back in in Britain that were that were fixed by statute and so just like the 1793 act what happened is there was a compensatory component [00:25:49] Speaker 01: that was decided by the 1793 act. [00:25:52] Speaker 03: I'm having a hard time believing you that that was the creation of punitive damages and that it didn't proceed the patent act. [00:25:59] Speaker 03: That just seems a little bit far fetched me to be honest. [00:26:02] Speaker 01: But that's not what I'm saying. [00:26:03] Speaker 01: Your honor. [00:26:03] Speaker 01: What I'm saying is in that context. [00:26:05] Speaker 01: Right. [00:26:06] Speaker 01: So there were punitive damages evolving and other causes of action. [00:26:10] Speaker 01: Right. [00:26:10] Speaker 01: That that came for fraud for example. [00:26:12] Speaker 01: So those were evolving. [00:26:14] Speaker 01: But if we look back to the analogous law here, which is what the Supreme Court tells us to do, there were not punitive damages that were decided by juries in a patent context. [00:26:25] Speaker 01: And so what happened was there were punitive damages, essentially. [00:26:29] Speaker 01: They were a penalty fixed by statute. [00:26:33] Speaker 01: And in the 1793 Act, Congress fixed that penalty at two times compensatory damages. [00:26:40] Speaker 01: So the compensatory [00:26:42] Speaker 01: damages were decided by the jury and the punitive portion was fixed by Congress. [00:26:47] Speaker 01: And so then Congress later, shortly thereafter, decided to make that discretionary. [00:26:53] Speaker 01: And when it did, it gave the power for the discretion of the penalty portion to judges. [00:26:58] Speaker 01: And that's the way it's been ever since. [00:27:04] Speaker 01: So, Your Honors, I'd be happy to answer any- Do either of my colleagues have any questions? [00:27:08] Speaker 04: No, I don't have any questions. [00:27:09] Speaker 04: So we don't have additional questions, so you have a minute and a half to wrap up, or you can say adieu, au revoir, goodbye. [00:27:18] Speaker 01: I'll wrap up briefly. [00:27:21] Speaker 01: Your Honors, we submit that the district court in this case did a thorough analysis of all the [00:27:27] Speaker 01: The decisions that are challenged here, we see no reason and no justification for overturning those. [00:27:33] Speaker 01: And on this question, whether we look at exemplary damages, regardless of whether they arise from legal or equitable remedies, or just focus on the issues in this case, exemplary damages arising from an equitable remedy, as the historical analysis shows, there's no basis to think that the Seventh Amendment requires a jury trial in this case. [00:27:57] Speaker 01: So with that, Your Honor, we submit the matter. [00:27:59] Speaker 04: Thank you for your argument. [00:28:00] Speaker 01: Thank you. [00:28:01] Speaker 04: All right. [00:28:02] Speaker 04: The appellant has two minutes. [00:28:09] Speaker 00: Thank you, Your Honor. [00:28:10] Speaker 00: I'd like to go back to the issue of whether exemplary damages are legal when the underlying compensatory damages award is equitable. [00:28:19] Speaker 00: And I want to direct the court. [00:28:20] Speaker 00: We just submitted a 28-J letter on it to the Supreme Court's recent decision in Jarkese. [00:28:25] Speaker 00: And Jarkese says that monetary relief is legal and where it is designed to punish and deter, not just compensate or restore the status quo. [00:28:38] Speaker 00: And the exemplary damages provided by the DTSA are designed to punish and deter [00:28:44] Speaker 00: regardless of whether the underlying compensatory damages award is equitable or legal. [00:28:51] Speaker 00: And therefore, under Jarkisi, this is legal relief to which a jury trial right attaches. [00:28:58] Speaker 00: Jarkisi builds on countless decisions from the Supreme Court, including Curtis, Pacific Marine, all cited in our brief, and I respectfully refer the court to those decisions. [00:29:08] Speaker 00: Also, as to Judge Koh's questions about looking to the Patent Act, [00:29:13] Speaker 00: We don't think you need to look at any sort of analogy here because the exemplary damages existed at the founding. [00:29:19] Speaker 00: But the Patent Act is a particularly poor analogy because, as Judge Cohen, your question suggested, enhanced damages didn't exist at the founding. [00:29:28] Speaker 00: So why replace something that existed at the founding with something that came later? [00:29:32] Speaker 00: You should look to exemplary damages. [00:29:33] Speaker 00: And those exemplary damages were awarded by juries, not just generally. [00:29:37] Speaker 00: We know it was generally. [00:29:39] Speaker 00: I, again, would direct the court to the Pacific Marine case from the Supreme Court [00:29:43] Speaker 00: But exemplary damages were awarded by juries in comparable circumstances like intentional torts, including conversion cases like the Wilkes case we cite in the reply brief at 12. [00:29:57] Speaker 00: So at common law, there was a well-established recognition at the founding that [00:30:05] Speaker 00: Exemplary damages and punitive damages were legal remedies that were for the jury, and under the Seventh Amendment, there should be a jury trial right for the exemplary damages at issue here. [00:30:15] Speaker 00: Thank you very much. [00:30:16] Speaker 04: Thank you both for your argument in this matter. [00:30:19] Speaker 04: This case will now stand submitted. [00:30:22] Speaker 04: As promised, we'll take a short recess. [00:30:26] Speaker 04: We'll be back in 10 minutes, and then we'll proceed on the final two matters.