[00:00:00] Speaker 04:
First case for argument this morning is 181744, allied machine and engineering versus competitive carbide.

[00:00:08] Speaker 04:
Mr. McIntyre.

[00:00:10] Speaker 04:
Thank you.

[00:00:17] Speaker 02:
I have the unenviable duty this morning of condensing eight years into 15 minutes.

[00:00:23] Speaker 02:
But I'm going to do my best.

[00:00:26] Speaker 02:
Before I start, I'd like to

[00:00:28] Speaker 02:
Give just a little bit of background here.

[00:00:31] Speaker 02:
Unlike many cases that probably come before you, this is not an abstraction for me.

[00:00:38] Speaker 02:
The gentleman who started Competitive Carbide and I used to be partners in an almost identical business.

[00:00:45] Speaker 02:
And I have made and designed these tools.

[00:00:50] Speaker 02:
So I know them inside and out.

[00:00:53] Speaker 02:
And not only does it give me confidence in my arguments,

[00:00:57] Speaker 02:
Also, the knowledge that what I'm going to talk about is substantially grounded in fact.

[00:01:04] Speaker 02:
So when I talk about inserts and pockets and angles, this is not something my client has told me or I've had to learn.

[00:01:12] Speaker 02:
I learned this the hard way when I was in law school with a couple of small children in a house.

[00:01:16] Speaker 04:
Well, I don't think we're litigating the underlying issues of the details of this.

[00:01:21] Speaker 04:
The issue, as you know, is if the district court below refuse to entertain your remaining arguments with regard to an act.

[00:01:30] Speaker 02:
That's correct.

[00:01:31] Speaker 02:
But they're all intertwined, and this is why.

[00:01:36] Speaker 02:
The first case, and this goes,

[00:01:41] Speaker 02:
substantially inequitable conduct arguments, which the lower court said weren't strong enough.

[00:01:47] Speaker 02:
And I'll talk about the procedures later.

[00:01:49] Speaker 04:
I don't think he said that the arguments weren't strong enough.

[00:01:52] Speaker 04:
He said it wasn't going to proceed with the case purely on inequitable conduct.

[00:01:57] Speaker 04:
One question I have for you is, in the discussion of inequitable conduct and in your papers, you continuously referred to monetary recovery and damages.

[00:02:09] Speaker 04:
What is the monetary recovery and damages you think you might obtain if the inequitable conduct allegations were litigated?

[00:02:16] Speaker 02:
Somewhere on the north side of $300,000 in costs in defending this case.

[00:02:21] Speaker 04:
So the costs, you want to have a trial, and the damages would be the cost you spent in having the trial, where you're the only one who wants the trial.

[00:02:32] Speaker 02:
No, no.

[00:02:33] Speaker 02:
The defense costs, up to the point where this case was stayed, was somewhere north of $250,000.

[00:02:40] Speaker 04:
Well, actually, that's funny.

[00:02:41] Speaker 04:
Maybe I'm misreading it.

[00:02:42] Speaker 04:
There are a few numbers thrown in, but I don't think I saw that.

[00:02:46] Speaker 04:
Initially, you said 140,000 in legal fees.

[00:02:50] Speaker 04:
And then somehow in your papers here, I thought we were up to 400,000.

[00:02:53] Speaker 04:
I didn't understand how we accumulated 250,000 in legal fees from district court to here.

[00:03:00] Speaker 02:
Because the two cases got intertwined.

[00:03:04] Speaker 02:
And in a damages hearing, I think we can parse out

[00:03:10] Speaker 02:
where case one overlapped on case two and case two overlapped on case one.

[00:03:15] Speaker 03:
When you say damages, are you referring to attorney's fees?

[00:03:17] Speaker 02:
Yes.

[00:03:19] Speaker 03:
Aren't attorney's fees distinct from damages?

[00:03:25] Speaker 02:
I treat it all as one under octane.

[00:03:28] Speaker 03:
Can you tell me where in octane they treat attorney's fees as damages?

[00:03:35] Speaker 02:
I think part of the issue that I think the court's concerned about is when this case was filed,

[00:03:41] Speaker 02:
And we started defending it.

[00:03:45] Speaker 02:
We did not have a clue as to the breadth and depth of the inequitable conduct.

[00:03:51] Speaker 02:
We had just finished defending case one successfully at the summary judgment level with no discovery whatsoever.

[00:04:00] Speaker 02:
So we thought we were over.

[00:04:02] Speaker 02:
Then this case started, and the two cases overlapped.

[00:04:07] Speaker 02:
Because one of the issues that was appealed

[00:04:10] Speaker 03:
I honestly don't understand how that answers my question or why it's relevant about this procedural history.

[00:04:20] Speaker 03:
Your argument seems to be you should have been able to pursue the inequitable conduct claim to get damages.

[00:04:27] Speaker 03:
But it seems like all we're talking about is attorney fees, which is distinct and separate from damages, isn't it?

[00:04:35] Speaker 02:
It can be one on the same, I believe.

[00:04:37] Speaker 03:
Again, I ask you, what supports that notion?

[00:04:39] Speaker 03:
Because damages are something that is usually awarded for infringement.

[00:04:45] Speaker 03:
There can be trouble damages for willful infringement and egregious conduct.

[00:04:50] Speaker 03:
Attorneys fees, at least in patent cases, are awarded under a separate statutory provision.

[00:04:56] Speaker 02:
I don't disagree.

[00:04:58] Speaker 02:
I think it's more of a semantic issue.

[00:05:00] Speaker 02:
And if we're on the wrong side of the semantic issue,

[00:05:02] Speaker 02:
I won't disagree with you.

[00:05:03] Speaker 04:
Well, that may be relevant if it misled the district court as it would have, I think, a number of us if you were just talking about damages and monetary recovery and we would say, well, wait a minute, there's none of that that's going to come from however much we over-litigate the issue of ineffable conduct.

[00:05:22] Speaker 02:
Well, I think the concern we've had is when we started, as I said, we had no clue what was actually going on behind the scenes.

[00:05:32] Speaker 02:
And all of this came out.

[00:05:34] Speaker 02:
Pardon?

[00:05:35] Speaker 01:
And yet you pled it.

[00:05:37] Speaker 01:
You pled an equitable conduct in your answer, despite your admission here that when that started, you had no clue about an equitable conduct.

[00:05:45] Speaker 02:
We pled it.

[00:05:46] Speaker 02:
We pled it as a defense.

[00:05:48] Speaker 02:
Because in case one, we learned that the plaintiff, same company, in case one was well aware

[00:06:01] Speaker 02:
of the prior art and the on sale bar, but they proceeded anyway.

[00:06:06] Speaker 02:
So we thought in an abundance of caution, we would plead it.

[00:06:09] Speaker 04:
Well, you didn't plead it as a defense, actually, under affirmative defense.

[00:06:13] Speaker 04:
Maybe I'm wrong, but you have your list under affirmative defenses, and then you have a counterclaim for DJ in validity.

[00:06:22] Speaker 04:
And then somehow within this in validity thing, you seem to be talking about inequitable conduct under the heading of invalidity.

[00:06:30] Speaker 04:
But you never mention, you mention the word material information.

[00:06:34] Speaker 04:
You never mention in the pleadings that I can find, so you can show me if I'm wrong.

[00:06:39] Speaker 04:
any intent to deceive.

[00:06:41] Speaker 04:
We didn't know that at the time.

[00:06:43] Speaker 04:
Well, don't you have to allege it?

[00:06:44] Speaker 04:
I mean, you have to allege it, right?

[00:06:47] Speaker 04:
How does the under equal trauma or whatever?

[00:06:49] Speaker 04:
By the way, just to take note of the fact that in the complaint, you also miscite the 35 CFR 1.56 for the basis, just the statutory basis for inequitable conduct.

[00:07:02] Speaker 04:
It's not 35.

[00:07:03] Speaker 04:
It's 37, which you cite somewhere else.

[00:07:05] Speaker 02:
Thank you.

[00:07:08] Speaker 02:
Going back.

[00:07:10] Speaker 02:
Because of what had happened in case one and the fact that they tried to put the 616 back in case one while the summary judgment was pending, we knew at that time with the 616 that it incorporated all of the prior art that had been disclosed to the plaintiff a year earlier.

[00:07:38] Speaker 02:
So the initial intent was the same as in the first case, invalidity because of prior art and on sale bar.

[00:07:49] Speaker 02:
That's what we were concerned about at the time.

[00:07:51] Speaker 04:
OK, well, you were concerned about, I guess, I just got to tell you, your brief is full of hyperbolic statements, one of which is to call this surreal.

[00:08:02] Speaker 04:
Why isn't it kind of surreal, if I'm understanding correctly?

[00:08:07] Speaker 04:
So tell me if I'm not, where we are now.

[00:08:10] Speaker 04:
The patent is gone.

[00:08:12] Speaker 04:
Yes.

[00:08:12] Speaker 04:
The case has been dismissed with prejudice.

[00:08:16] Speaker 04:
And so as I see where we are, you have an allegation of inequitable conduct, which will get you no further relief than already exists, except for the attorney's fees that you would incur

[00:08:31] Speaker 04:
by pursuing this inequitable conduct claim.

[00:08:34] Speaker 04:
And that's just a question, because nobody is required to give you attorney's fees for inequitable conduct.

[00:08:39] Speaker 04:
First thing, you might lose it.

[00:08:40] Speaker 04:
And even if you win it, you're not automatically entitled to attorney's fees.

[00:08:44] Speaker 04:
Am I misreading something about what's going on in this case?

[00:08:49] Speaker 02:
It is so convoluted.

[00:08:52] Speaker 04:
Well, I said it.

[00:08:53] Speaker 04:
I mean, they seem to be surreal in the respect of why are we here and what are we doing.

[00:08:59] Speaker 04:
But I don't know that it's that convoluted.

[00:09:01] Speaker 02:
Well, it is, because it isn't.

[00:09:04] Speaker 02:
Maybe convoluted is the wrong word.

[00:09:06] Speaker 02:
The whole point is when case number two was filed, when case number two was filed,

[00:09:19] Speaker 02:
the accused device, the helmet head tool, had been disclosed in case one as to have been put on the market, made, used, and sold 2001, 2002.

[00:09:33] Speaker 04:
What has that got to do with anything we're talking about here, about whether you ought to be able to pursue an inequitable conduct claim on a patent that no longer exists?

[00:09:44] Speaker 02:
Because up until

[00:09:47] Speaker 02:
up until the point where the patent was invalidated.

[00:09:49] Speaker 02:
This was a live case.

[00:09:52] Speaker 02:
It was stayed, but it was live.

[00:09:54] Speaker 02:
OK.

[00:09:54] Speaker 04:
All right.

[00:09:55] Speaker 04:
OK.

[00:09:55] Speaker 04:
OK.

[00:09:56] Speaker 04:
So it's alive until it's declared invalid.

[00:09:59] Speaker 02:
And here's the distinction.

[00:10:00] Speaker 02:
And this is why this case is so unique.

[00:10:04] Speaker 02:
In all of the other cases that have been cited, even by allied, the reexaminations and the litigation were between the same parties.

[00:10:17] Speaker 02:
Here, the re-examination.

[00:10:20] Speaker 02:
What has that got to do with anything we're talking about here?

[00:10:23] Speaker 02:
It has to do with it because when the case law talks about the re-examination ending the case, that has to do with the re-examination that was connected with the case.

[00:10:36] Speaker 02:
I'm trying to think of an analogy, but an analogy would be you sue a doctor for malpractice.

[00:10:43] Speaker 02:
And during the course of the case, somebody shoots the doctor.

[00:10:47] Speaker 02:
Is your case over?

[00:10:48] Speaker 02:
Someone else invalidated the 616 patent.

[00:10:53] Speaker 04:
Well, that's because you presumably owed some damages for the malpractice.

[00:10:58] Speaker 04:
Real damages, as Judge Hughes pointed out, not attorney's fees.

[00:11:03] Speaker 04:
So right, the case might not be over because you still have a malpractice claim in which you may be entitled to damages.

[00:11:09] Speaker 04:
And we may be entitled to damages.

[00:11:10] Speaker 04:
Here we're talking about

[00:11:11] Speaker 04:
an inequitable conduct claim, the relief granted even if you were to prevail, which is dubious, is the patent is unenforceable, which is already the state of play here, right?

[00:11:26] Speaker 02:
I will admit the hole in our argument is when we started, we started the defense.

[00:11:30] Speaker 03:
Isn't the hole in your argument that you never filed a proper 285 motion

[00:11:35] Speaker 03:
were attorney's fees.

[00:11:37] Speaker 03:
You may or may not have won that, but you didn't ever file one after the dismissal.

[00:11:43] Speaker 03:
We couldn't.

[00:11:44] Speaker 03:
Sure you could have.

[00:11:45] Speaker 03:
It was a final judgment.

[00:11:47] Speaker 03:
Rule 54-something, I forget which subsection, allows you to file a motion for attorney's fees within a certain number of days of the final judgment.

[00:11:56] Speaker 03:
Whether you would be considered a prevailing party under 285, whether it was exceptional circumstances, are all questions that would have been live for the district court.

[00:12:05] Speaker 03:
You may have lost.

[00:12:06] Speaker 03:
But you could file a motion for attorney's fees.

[00:12:10] Speaker 03:
Why didn't you?

[00:12:11] Speaker 02:
Because we took a different tack.

[00:12:13] Speaker 02:
We took the position that we couldn't do that.

[00:12:16] Speaker 02:
We couldn't go back and relitigate.

[00:12:18] Speaker 03:
You believe that position is wrong, which it is.

[00:12:22] Speaker 03:
Why do you think you couldn't file that motion?

[00:12:24] Speaker 03:
You're now trying to come up here and say, attorney's fees are damages, which is what made this completely different part of the case still alive.

[00:12:33] Speaker 03:
When the damages for inethelial conduct, as I think we've said,

[00:12:37] Speaker 03:
about half a dozen times already are invalidation of the patent, which had already happened.

[00:12:42] Speaker 02:
I don't disagree.

[00:12:44] Speaker 02:
Our read of the law was we had to get the original case opened up, the 616, the patent infringement case reopened before we could proceed with our inequitable conduct claim.

[00:12:55] Speaker 04:
So you didn't want, though, when you're talking about getting attorney's fees, you're not talking about getting the attorney's fees that have been earned thus far.

[00:13:02] Speaker 04:
You're talking about you want to be able to litigate the inequitable conduct claim and then get attorney's fees for litigating an inequitable conduct claim.

[00:13:11] Speaker 04:
Is that what's going on here?

[00:13:12] Speaker 02:
No, we want attorney's fees for the defense of the case up until the point where it was dismissed.

[00:13:18] Speaker 02:
That's our attorney's fees point.

[00:13:21] Speaker 04:
And why didn't you file a motion?

[00:13:23] Speaker 02:
Because the case was closed.

[00:13:25] Speaker 04:
That's when you get attorney's fees.

[00:13:27] Speaker 03:
That's when you file attorney fees petitions.

[00:13:31] Speaker 03:
You can file protective ones before a final judgment, but you don't have to.

[00:13:35] Speaker 03:
You file after.

[00:13:36] Speaker 03:
I mean, have you read the Federal Rules of Civil Procedure on this?

[00:13:39] Speaker 03:
Of course.

[00:13:40] Speaker 03:
Well, what does Rule 54 say?

[00:13:44] Speaker 02:
In our opinion, you may be right.

[00:13:46] Speaker 02:
I may be wrong.

[00:13:46] Speaker 02:
But the question was, we could not bring that issue to the lower court with the case dismissed.

[00:13:53] Speaker 02:
Our only avenue.

[00:13:55] Speaker 03:
Do you have a single case that says a dismissal prevents you from filing an attorney fee petition?

[00:14:03] Speaker 03:
No.

[00:14:04] Speaker 01:
I would like on rebuttal for you to be prepared to explain to us why we should not sanction you for a frivolous appeal as filed and as argued.

[00:14:14] Speaker 01:
I see no basis for this appeal.

[00:14:16] Speaker 01:
I think it's a colossal waste of the court's time, your time, his time, and the party's money to the extent that they're paying you to do this, both of you.

[00:14:25] Speaker 01:
So I'd like you, when you stand back up, to be prepared why we should not sanction you for having filed a frivolous appeal.

[00:14:33] Speaker 02:
Thank you.

[00:14:42] Speaker 00:
Good morning, Your Honors.

[00:14:42] Speaker 00:
May it please the Court, Nathan Webb, appearing on behalf of the Appellee, Allied Machine Engineering.

[00:14:48] Speaker 00:
I'd like to begin our conversation this morning by providing a little more focused context for assessment of the District Court's February 2018 decision from which this appeal arises, which dismissed all of the claims in the case.

[00:15:03] Speaker 00:
And what I want to do is remind the court that there were two separate and distinct motions that the court was answering in that order.

[00:15:11] Speaker 00:
The first is an early 2017 motion that Allied had made under Federal Rule of Civil Procedure 41A that sought voluntary dismissal of its infringement claims and the defendant competitive carbides, invalidity, declaratory judgment, inequitable conduct, counterclaim,

[00:15:33] Speaker 00:
And then the second motion that the court was responding to was the defendant's motion to vacate the stay, set the case for a case management hearing so that they could proceed to trial on the question of inequitable conduct.

[00:15:49] Speaker 00:
In that context, when we look at the district court's decision, it's clear that there's two parts.

[00:15:54] Speaker 00:
The first is the court, we believe, properly concluding that because the 616 patent had been found invalid in the PTAB proceeding that was now a final decision, that it no longer had subject matter jurisdiction over either the plaintiff's claims or the defendant's counterclaim for invalidity of the patent.

[00:16:15] Speaker 00:
Carbide seems to admit that its invalidity and unenforceability counterclaims were moot when PTAP invalidated the 616 patent on both page 14 of its reply brief and also in the joint appendix at page 515.

[00:16:30] Speaker 00:
The second part of the court's decision deals with competitive Carbide's motion to vacate the stay and move the case to trial.

[00:16:40] Speaker 00:
And what I think the court is doing in the second to last paragraph of its opinion and order is saying that because the counterclaim did not specifically mention attorney's fees and was focused only on the invalidity question, that there was no reason to move to trial on that.

[00:16:57] Speaker 00:
And I think the court is exactly right in saying that in the court's order, there was nothing that prevented

[00:17:05] Speaker 00:
or discouraged competitive carbide from filing a motion for attorney's fees under Section 285 and Federal Rule of Civil Procedure 54 v.

[00:17:14] Speaker 00:
2.

[00:17:14] Speaker 00:
Right.

[00:17:15] Speaker 03:
They could have filed one after the court entered the opinion and judgment within whatever the time the rules were met.

[00:17:21] Speaker 03:
They may not have prevailed because it may not have given them prevailing party status, but that would have been something for the district court to figure out.

[00:17:28] Speaker 00:
That's exactly correct, Your Honor.

[00:17:30] Speaker 00:
And this court, I think, has been very clear in IPX Holding versus Amazon and other cases that any claim to attorney's fees must be processed in compliance with Rule 54D2B and that no provision in Section 285 exempts request for attorney's fees there under from compliance with the rule.

[00:17:49] Speaker 00:
The district court seemed to be leaving the door wide open for the defendant to file such a motion by not entering final judgment even after it had issued its decision.

[00:18:00] Speaker 04:
Well, it's been a little unclear to me and maybe that would have been sufficient.

[00:18:04] Speaker 04:
That's a little ambiguous to me because what I understood

[00:18:08] Speaker 04:
your opposing counsel to be really wanting was coupled with the attorney fee, he wants an opportunity to litigate this inequitable conduct claim, notwithstanding that there are no additional damages or monetary recovery or anything that would result from that, right?

[00:18:25] Speaker 04:
I mean, I don't know.

[00:18:26] Speaker 04:
It's a question of interpreting his motives.

[00:18:28] Speaker 04:
But it seems to me maybe he didn't file the attorney's motion because somehow he just wants to litigate this inequitable conduct claim.

[00:18:36] Speaker 00:
Your Honor, I think that that suspicion is confirmed by their conduct after the case was stayed in 2013.

[00:18:45] Speaker 00:
And you'll recall that as soon as that ex parte reexamination, which was instituted by a third party, was actually accepted by the USPTO, that we filed a motion to stay.

[00:19:01] Speaker 00:
And then after that, they filed a motion.

[00:19:04] Speaker 00:
And we had extensive pleadings on whether the stay could be vacated.

[00:19:07] Speaker 00:
So they wanted to litigate this, even though we were saying that we should wait to make sure that the patent is valid before we continue.

[00:19:15] Speaker 04:
Is that where these attorney's fees mounted up?

[00:19:18] Speaker 04:
Because it was hard for me to tell why.

[00:19:22] Speaker 00:
Your Honor, I think you've correctly observed that the pleadings in this case

[00:19:27] Speaker 00:
include a number of different monetary amounts and it's difficult to understand exactly what those are tied to or at what phase of the case.

[00:19:37] Speaker 04:
Anything else?

[00:19:41] Speaker 00:
I'm happy to address the merits of the

[00:19:43] Speaker 00:
this inequitable conduct claim in the event that the court thinks that there was some error by the district court.

[00:19:50] Speaker 00:
We don't think that it meets the fair sense standard.

[00:19:52] Speaker 04:
The merits of the inequitable conduct claim are not before us.

[00:19:55] Speaker 00:
I agree, Your Honor.

[00:19:56] Speaker 00:
I agree.

[00:19:56] Speaker 04:
Not under anybody's scenario are we litigating inequitable conduct here, now, today.

[00:20:02] Speaker 04:
Thank you.

[00:20:02] Speaker 00:
Thank you, Your Honor.

[00:20:17] Speaker 02:
The reason that the post-judgment 285 claim was not raised is because the court said we didn't have the opportunity to raise that claim because we didn't plead it initially.

[00:20:29] Speaker 02:
And we took that on face value.

[00:20:31] Speaker 02:
I don't disagree with you that there may have been a procedural remedy.

[00:20:34] Speaker 03:
I don't think that's what the district court said.

[00:20:37] Speaker 03:
I don't think the district court ever prohibited you from raising a subsequent

[00:20:42] Speaker 03:
attorney's fees request the district court said I'm not going to consider it now because I don't see anything sufficient in the papers to qualify as a motion he didn't say you can't file a motion that was our interpretation that he had closed the door can you point to me any language in the district court's opinion that says that

[00:21:11] Speaker 03:
Not language that says you didn't include it in your complaint or something like that, because that's certainly true.

[00:21:19] Speaker 02:
There's no question we didn't include it in our complaint.

[00:21:22] Speaker 03:
But a language that says, and furthermore, we prohibit allied, or not allied, you from filing an attorney's fee motion under 285.

[00:21:35] Speaker 03:
Sorry, I don't want to take up your rebuttal time.

[00:21:37] Speaker 03:
Why don't you respond to Judge Moore's question that she posed?

[00:21:41] Speaker 02:
The reason is we proceeded in good faith.

[00:21:44] Speaker 02:
It was our belief that the judge had closed the case and that 285 was foreclosed because we didn't plead it.

[00:21:51] Speaker 02:
I will concede we had no idea that 285 would apply in this case when we filed the answer.

[00:21:59] Speaker 02:
It was only after we got into the discussions and into the depositions and started looking at what was going on in this case that we realized it was a 285 case.

[00:22:09] Speaker 04:
And as I recall, in our motion to vacate, we were saying- You're telling us now the 285 case had only to do with the inequitable conduct piece of it and not the other piece of it?

[00:22:28] Speaker 02:
The 285 case focuses on the fact that not only was the 616 patent prosecuted with the full knowledge of the prior art,

[00:22:39] Speaker 02:
But what I can't begin to understand, maybe you can see it more clearly than I can.

[00:22:49] Speaker 02:
But the device that they accused of infringing the patent was the device that was already on the market.

[00:22:58] Speaker 01:
Pardon?

[00:22:59] Speaker 01:
This case has nothing to do with the merits.

[00:23:01] Speaker 01:
You could be right.

[00:23:02] Speaker 01:
In fact, it turns out you were.

[00:23:04] Speaker 01:
The patent was invalid.

[00:23:05] Speaker 01:
It turns out you were right.

[00:23:07] Speaker 01:
It was an invalid patent that your client was accused of.

[00:23:11] Speaker 01:
Why I asked you to defend the appeal has nothing to do with the merits of the underlying invalidity or inequitable conduct claim.

[00:23:20] Speaker 01:
It has to do with your process, you personally, in having filed the appeal

[00:23:27] Speaker 01:
arguing that a lower court should conduct an entire proceeding of inequitable conduct when virtually nothing has happened to this point.

[00:23:36] Speaker 01:
He should begin the process of a claim on inequitable conduct, take it through trial, so that you can then get attorney's fees when the patent is invalid.

[00:23:50] Speaker 05:
The reason?

[00:23:51] Speaker 01:
I am flabbergasted at the fact that you did not advise your client properly, that that would be a colossal waste of time for everyone, and that you would rake up huge fees for all of those proceedings, which your client would then be required to pay.

[00:24:09] Speaker 01:
And I'll also tell you, I don't like your shell game with the number of attorney's fees.

[00:24:16] Speaker 01:
400,000 and change?

[00:24:19] Speaker 01:
What lawyer writes that way?

[00:24:20] Speaker 01:
We're seeking 400,000 and change.

[00:24:25] Speaker 02:
What the?

[00:24:25] Speaker 02:
That was, the reason that that was put in there is it's illustrative.

[00:24:28] Speaker 02:
The reason that the appeal was filed is because our understanding of Judge Boyko's order is because you didn't plead 285, you're permanently foreclosed.

[00:24:39] Speaker 03:
So what, I mean as a lawyer and subject to all your ethical rules, what

[00:24:46] Speaker 03:
research did you undertake to come to the conclusion that you were prohibited from filing a 285 motion or the other argument you seem to raise that attorney's fees are part of damages for inequitable conduct?

[00:25:00] Speaker 03:
Because at least on the first part, there has to be dozens of cases that say you can file a 285 motion after a case is dismissed.

[00:25:13] Speaker 03:
You can't just come up here and say, because I've asked you if you have any precedent and support, you didn't cite anything in your brief.

[00:25:21] Speaker 03:
It doesn't even feel like you've done any legal research here.

[00:25:24] Speaker 03:
And if you've done a modicum of legal research, you would have realized that you should have filed a 285 motion.

[00:25:31] Speaker 03:
Frankly, if you've done any modicum of legal research, you would have filed a 285 motion to protect your client.

[00:25:39] Speaker 02:
our read of the district court's order.

[00:25:41] Speaker 03:
That's not good enough.

[00:25:43] Speaker 03:
When you get an order from the district court and you think it's wrong, you have to at least do some legal research to determine whether there's appealable error there or not.

[00:25:53] Speaker 03:
If you thought he had prohibited you from filing that motion, you probably should have tried to protectively file one and then appeal, or you could have at least said we were prevented from doing it, but you didn't even cite any cases to show that you were prevented from doing it.

[00:26:11] Speaker 02:
The reason we went in this direction is because

[00:26:14] Speaker 02:
The patent was not invalidated.

[00:26:16] Speaker 02:
In this case, it was externally invalidated.

[00:26:18] Speaker 03:
It doesn't matter.

[00:26:19] Speaker 01:
I mean, you're arguing a bunch of subsidiary facts that don't... Does it matter if you didn't shoot the dead guy, but somebody else did?

[00:26:25] Speaker 01:
He's still dead!

[00:26:26] Speaker 02:
I don't disagree.

[00:26:27] Speaker 02:
That's why we believe that the appellate route was the correct one.

[00:26:31] Speaker 04:
Can you explain to me the difference?

[00:26:32] Speaker 04:
We were $150,000 initially for attorney's fees, and now we're up to $400,000 in change.

[00:26:40] Speaker 04:
Is that for the cost of this appeal?

[00:26:42] Speaker 02:
No, no.

[00:26:43] Speaker 02:
In fact, I did the appeal for free.

[00:26:46] Speaker 02:
Because the principal is a good friend of mine.

[00:26:48] Speaker 04:
You get what you pay for.

[00:26:53] Speaker 04:
So we're looking at a situation.

[00:26:55] Speaker 04:
If you were to prevail here, you go to trial on inequitable conduct.

[00:27:01] Speaker 04:
you lose then your client is out whatever fortunate attorney's fees have been incurred.

[00:27:08] Speaker 04:
If you win you still have to ask for attorney's fees and I think you're on maybe thin ice under the circumstances where a district court says we litigated an equitable conduct on

[00:27:20] Speaker 04:
for no reason other than attorney's fees.

[00:27:23] Speaker 04:
I think whether or not you're going to get attorney's fees is a really open question.

[00:27:27] Speaker 04:
So that's the situation.

[00:27:28] Speaker 04:
You're here spending our time and the other side's time and money trying to press.

[00:27:34] Speaker 04:
Am I missing something in what's going on here?

[00:27:37] Speaker 02:
To a certain extent, you are.

[00:27:42] Speaker 02:
What we were concerned about is when the district court terminated the case because of the external invalidation,

[00:27:49] Speaker 02:
All we wanted the district court to do was reopen the case and let us go back and have a 285-type proceedings, which would have been very brief on the inequitable conduct.

[00:28:01] Speaker 02:
That's all we were asking for.

[00:28:03] Speaker 04:
But you can't get a 285 proceeding on the inequitable conduct until the whole inequitable conduct thing is adjudicated.

[00:28:09] Speaker 04:
You can't say we sort of alleged inequitable conduct and now we're entitled to attorney's fees for inequitable conduct.

[00:28:16] Speaker 04:
You'd have to adjudicate the inequitable conduct claim, right?

[00:28:19] Speaker 04:
You're missing a step here.

[00:28:21] Speaker 04:
And that adjudication would be costly to both sides.

[00:28:25] Speaker 04:
and using resources of the judiciary for no reason other than you should be able to collect, in case you win, attorneys you incurred in that proceeding.

[00:28:35] Speaker 04:
What am I missing?

[00:28:37] Speaker 02:
What we're missing here is, had this case gone to trial, forget karma and the re-examination.

[00:28:47] Speaker 02:
Our position was,

[00:28:49] Speaker 02:
We would win.

[00:28:50] Speaker 02:
We'd probably get summary judgment, just like we got in case number one.

[00:28:54] Speaker 02:
And then we'd get our attorney's fees.

[00:28:56] Speaker 04:
Well, you don't automatically get attorney's fees.

[00:28:59] Speaker 02:
Pardon?

[00:29:00] Speaker 04:
You don't automatically get attorney's fees.

[00:29:02] Speaker 02:
No, but we can certainly adjudicate that.

[00:29:07] Speaker 04:
But would you say if this case had gone to trial, are you including in that inequitable conduct?

[00:29:13] Speaker 02:
If the case had gone to trial, my read was it was going to go to trial just like case one.

[00:29:20] Speaker 02:
It would go out on summary judgment very quickly.

[00:29:22] Speaker 01:
Just to be clear, summary judgment is never granted for inequitable conduct.

[00:29:26] Speaker 01:
It's impossible to prove intent beyond a reasonable doubt for any juror.

[00:29:32] Speaker 01:
Summary judgment just doesn't work for inequitable conduct.

[00:29:36] Speaker 01:
Maybe there is a case somewhere where it's happened, but given the level of intent that is required by our case law, it is not an issue that's almost ever right for summary judgment.

[00:29:47] Speaker 02:
I didn't expect summary judgment on inequitable conduct.

[00:29:49] Speaker 02:
I expected summary judgment on on-sale bar and prior art, which they had in their hands.

[00:29:55] Speaker 01:
So all this time, just to be clear, all of this time, we've been thinking that your only reason for wanting to continue the trial was to litigate the issue of inequitable conduct and unenforceability for which potentially you get 25 damages.

[00:30:15] Speaker 01:
Do you think the district court erred in not letting you also litigate all of your invalidity claims, even though the patent is already invalid?

[00:30:23] Speaker 02:
No.

[00:30:24] Speaker 01:
No?

[00:30:28] Speaker 02:
What we're saying is the validity was externally determined.

[00:30:34] Speaker 02:
Had this gone to trial, we'd have probably determined invalidity on summary judgment on sale bar.

[00:30:41] Speaker 02:
in priority.

[00:30:43] Speaker 02:
That was, I think, in the 90th percentile, given the circumstances.

[00:30:48] Speaker 02:
At that point, we would then proceed to ask for our attorney's fees.

[00:30:54] Speaker 01:
So you're saying the error is the district court didn't, right now, let you litigate invalidity?

[00:31:01] Speaker 02:
No.

[00:31:01] Speaker 02:
I'm saying what the district court erred was not letting us proceed to make

[00:31:12] Speaker 02:
the attorney's fees argument based on the facts in the underlying case.

[00:31:18] Speaker 04:
So now you're telling us this case has nothing to do with your wanting to be able to litigate inequitable conduct.

[00:31:24] Speaker 04:
It only has to do with attorney's fees encouraged not in connection with inequitable conduct, but incurred in connection with the other validity assets.

[00:31:34] Speaker 04:
Is that right?

[00:31:35] Speaker 02:
In part.

[00:31:38] Speaker 02:
In part.

[00:31:40] Speaker 02:
because our claim for attorney's fees.

[00:31:42] Speaker 04:
What's the other part that I'm missing?

[00:31:43] Speaker 04:
That's part of it.

[00:31:44] Speaker 04:
What's the other part?

[00:31:47] Speaker 02:
I think we're mixing up the conduct of the plaintiff in the case with inequitable conduct because it's a case within a case.

[00:31:57] Speaker 03:
So if we miraculously agreed with you and send this back, what are you going to ask the district court to do on remand?

[00:32:04] Speaker 02:
I'm going to ask him to entertain

[00:32:07] Speaker 02:
an attorney's fees claim under 285.

[00:32:09] Speaker 03:
When you never filed one before.

[00:32:12] Speaker 02:
We didn't anticipate this conduct.

[00:32:14] Speaker 02:
What conduct?

[00:32:16] Speaker 01:
The voluntary dismissal?

[00:32:18] Speaker 02:
No.

[00:32:18] Speaker 01:
The inequitable conduct?

[00:32:20] Speaker 02:
No, I'll tell you what conduct we didn't anticipate.

[00:32:24] Speaker 02:
When I took the deposition of the lawyer who prosecuted the 616, he admitted that he

[00:32:33] Speaker 03:
You knew all this at the time their motion to dismiss came in.

[00:32:37] Speaker 03:
You responded.

[00:32:38] Speaker 03:
You knew all of this.

[00:32:40] Speaker 03:
You didn't file a motion for attorney's fees.

[00:32:43] Speaker 02:
No.

[00:32:44] Speaker 02:
We put that all in our motion to reopen the case so we could proceed.

[00:32:49] Speaker 03:
Where in that motion to reopen the case does it ask for attorney's fees?

[00:32:54] Speaker 02:
That's what we asked for.

[00:32:55] Speaker 02:
We wanted the case reopened so we could litigate the issue of inequitable conduct.

[00:33:01] Speaker 04:
But now... So you couldn't... I mean, you weren't seeking fees now on this record.

[00:33:05] Speaker 04:
You were saying you're forcing the judge to let you have a bench trial on inequitable conduct and then get attorney's fees for that, right?

[00:33:15] Speaker 04:
That's what you were looking for?

[00:33:16] Speaker 02:
We're asking the judge to have a bench trial on the plaintiff's conduct up to the point where

[00:33:25] Speaker 02:
The 616 was externally invalidated because of the prosecution of the patent and the prosecution of the case.

[00:33:37] Speaker 02:
That's the issue.

[00:33:39] Speaker 04:
You want to be able to litigate inequitable conduct.

[00:33:44] Speaker 04:
And your argument is, when we say why the patent's already invalid, all the claims have been struck down.

[00:33:50] Speaker 04:
It's because you think you can get attorney's fees for this.

[00:33:52] Speaker 04:
So you want to be forced to the district court to litigate something so that you think you might likely or possibly win attorney's fees, assuming, of course, you win the patent.

[00:34:04] Speaker 02:
It's the case within the case.

[00:34:07] Speaker 02:
Yes, it's the same evidence that we would put on to invalidate the patent.

[00:34:13] Speaker 02:
But that evidence is the same evidence that would suggest a 285 award.

[00:34:19] Speaker 04:
Do you have any estimate about how much the bill for attorney's fees would be with the litigation of bench trial on inequitable conduct?

[00:34:28] Speaker 02:
In this case, probably two days, three days of preparation.

[00:34:33] Speaker 02:
All the work's been done.

[00:34:34] Speaker 02:
All the evidence is there.

[00:34:40] Speaker 02:
That's the issue.

[00:34:44] Speaker 02:
It was the tail.

[00:34:46] Speaker 02:
And we were shocked because we didn't think the karma reexamination would amount to anything.

[00:34:53] Speaker 02:
We followed those hundreds and hundreds of pages.

[00:34:56] Speaker 04:
OK, so you were wrong.

[00:34:57] Speaker 04:
But you should celebrate because you got rid of the patent.

[00:35:00] Speaker 04:
You shouldn't bemoan the fact that you were wrong and the patent was invalidated.

[00:35:04] Speaker 04:
I don't quite get that.

[00:35:05] Speaker 02:
Well, I don't bemoan that.

[00:35:08] Speaker 02:
But what I do bemoan is the fact

[00:35:11] Speaker 02:
that we had to litigate this case as if it were a real patent infringement case right up to the point of the karma stay.

[00:35:20] Speaker 02:
And it wasn't anything remotely like a legitimate patent infringement case.

[00:35:26] Speaker 04:
Thank you.

[00:35:28] Speaker 04:
The case is submitted.

[00:35:28] Speaker 04:
Thank you.