[00:00:00] Speaker 03:
Case for today is 2018-1488 Cave Consulting versus Truven Health.

[00:00:07] Speaker 03:
Mr. Is it Brophy?

[00:00:09] Speaker 03:
Please proceed.

[00:00:16] Speaker 00:
Good morning.

[00:00:16] Speaker 00:
My name is Richard Brophy.

[00:00:17] Speaker 00:
I may have pleased the court.

[00:00:20] Speaker 00:
I'll be speaking on behalf of Cave Consulting Group this morning.

[00:00:24] Speaker 00:
I'll admit I tussled with which issue to start with today.

[00:00:27] Speaker 00:
Obviously, there are some significant and unfortunate 285 issues to address, as well as some underlying 101 issues.

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But as the panel may be aware, recently we filed a motion to vacate the appeal on at least the 101 issue and remand that back to the district court for dismissal.

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And I'll provide a little bit of context for this.

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There was another case that was pending previous to this one.

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that involved assertion of a parent patent in his family.

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And we tried that case to a jury trial, went up on appeal, and unfortunately received an adverse claim construction ruling from this court that undid that jury verdict.

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We petitioned for rehearing and went up and filed a petition for cert.

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Those were denied very recently.

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And as a result of the denial of that petition for cert, that claim construction issue is no longer appealable and final for us.

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the same exact claim language that appears in that earlier patent also appears in the patent that's asserted in the Truven case, not in the HCSC case, but in the Truven case.

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And so we filed the present motion that's pending with the court to vacate the 101 decision, number one, because there's no longer an infringement issue as a result of the petition for cert B denied.

[00:01:40] Speaker 01:
As I understand it, the Federal Circuit opinion that issued the adverse claim construction for you came out

[00:01:50] Speaker 01:
a year ago, a couple months before you filed your blue brief in this case.

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But I don't recall seeing either in your blue brief or your subsequent gray brief any discussion about that case and any potential mooting effect that it might have on this case.

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And so at least from you, the first time we heard about this parallel litigation was a week ago.

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And so it

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Makes me question whether or not there really was ever a mooting event there, given this rather late in the game, last second Hail Mary motion you filed last week.

[00:02:32] Speaker 00:
I understand.

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Certainly from our perspective, we were holding out hope that the original decision from the Federal Circuit panel on that claim construction issue would be either reheard en banc or taken up by the Supreme Court.

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And so perhaps it was

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And I'll say I don't recall the specific timing of when we filed the briefs in this case and when the Federal Circuit's panel decision was.

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You may be absolutely correct about that.

[00:03:00] Speaker 01:
Yeah, the panel decision was March 2018.

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Your blue brief was July 30th, 2018.

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So I think all I can say is we were holding out hope that there would be some undoing of that decision.

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I don't mean to whine about that decision, but it was

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peculiar in the way it was resolved, at least from our perspective.

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And so we were pressing legitimately to have that reviewed by the en banc panel or by the Supreme Court.

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So from our perspective, the first moment that the appeal in this case was actually mooted is when our final attempts to appeal to the Supreme Court were exhausted with the denial of our petition.

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That was January 5.

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I believe that's correct.

[00:03:39] Speaker 01:
2019.

[00:03:39] Speaker 01:
I believe that's correct, Your Honor.

[00:03:40] Speaker 01:
And then your motion to vacate came in several weeks later.

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Five weeks later.

[00:03:44] Speaker 01:
Last week.

[00:03:44] Speaker 00:
That's correct, Your Honor.

[00:03:46] Speaker 00:
In that intervening period, we did a series of legal research.

[00:03:49] Speaker 01:
I guess what I'm wondering is, were you quietly, to yourselves, thinking about the potential that there was a mootness, but you didn't want to raise it, and then once all appeals were exhaust in the parallel litigation, then at that time you knew and understood and recognized there was a

[00:04:07] Speaker 01:
mooting event, or is this something you just came up with in preparation for oral argument here?

[00:04:12] Speaker 00:
Certainly not.

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We were aware that other members of the Patent family could be affected by this issue.

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And perhaps we should have raised that in our briefing and didn't.

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And if that's something we should have done, I apologize sincerely for that.

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My understanding was always that all of the parties true in HCSC and Optum Insight, the named defendant in that case,

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were well aware that an adverse claim construction would apply equally to all the patents that include that claim language.

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All I can say is that when the Supreme Court made its final determination not to take up our petition, we determined that was a finally adjudicated issue against us and moved to render this appeal moot.

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put any concerns about this address.

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There's no gamesmanship there.

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I don't think there would be any benefit to it because the HCSC case, which is also grappling with a 101 issue here, is unaffected by that decision.

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It doesn't include the same claim language.

[00:05:09] Speaker 03:
When did the Supreme Court issue its denial of your request for certiorari?

[00:05:14] Speaker 03:
In January.

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January 5.

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So we were going to be grappling with a 101 issue regardless of whether it was a Matruvian case or the HCSC case or both.

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It's not a matter of gamesmanship.

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We just saw that during the routine course of following all these appeals up, as soon as the Supreme Court decided it was not going to take up the issue, we realized that we were out of options and that we had to... What if we were to disagree that the cert denial was a mooting event for the controversy between you and Truven?

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Then in that case, we would take up the substance of the 101 issue

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Can you?

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You filed a covenant not to sue last week.

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So is there any controversy left between you and the other party?

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From our perspective, there was no controversy at the exact moment that the Supreme Court denied it.

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No, but I'm taking that away from you.

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OK, I understand.

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If your hypothetical is that in the absence of that decision, or if that decision doesn't have any controlling merit, then yes, we did give Truman a covenant not to sue.

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And doesn't that extinguish the controversy between you and Truven?

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Truven does not have a DJ claim against us for invalidity or non-infringement.

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And so our issuance of the covenant not to sue, which we perceived as an affirmation of the mooting by the Supreme Court, but never setting aside that issuance of that covenant not to sue resolved the controversy between the parties to the extent the Supreme Court decision didn't already do that.

[00:06:50] Speaker 00:
I hope that answers your question.

[00:06:52] Speaker 01:
Well, I guess what I'm wondering is, do we just dismiss your appeal as to the Section 101 appeal?

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I see.

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From our perspective, there are two lines of case law that deal with this issue.

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One in which the mooting event is not of the party's doing.

[00:07:10] Speaker 01:
Right.

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And this one is of your own doing, in my hypothetical.

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So then what happens?

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In that hypothetical where we have made it take place?

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We don't vacate the underlying district court judgment.

[00:07:21] Speaker 00:
then what we would request an alternative is to have it remanded so that we can argue to the district court about whether her decision should be vacated.

[00:07:30] Speaker 00:
That's our alternative request.

[00:07:32] Speaker 01:
So just to clarify, we would dismiss your 101 appeal, because there's no controversy now, given that you've issued the covenant not to sue.

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But you would want us to remand it back to the district court

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the judge there to consider in the first instance whether or not she should vacate her own 101 judgment?

[00:07:55] Speaker 00:
Yes, and in addition to the reason that the Supreme Court's claim construction came out, which I think affects and impacts, as we said in our briefing, her 101 determination.

[00:08:05] Speaker 00:
It was motivated by the claim construction in the case.

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In addition to that, her decision was also was issued before Bergheimer came out, which we, as you can tell from our briefing, believe significantly shifted the

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appropriate legal analysis to be performed and factual analysis to be performed on the underlying 101 issue.

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So we think in either case the case should be sent, at a bare minimum, the case should be sent back to Judge Ilston to determine in the first instance whether her 101 decision is still appropriate in light of the changed claim construction.

[00:08:37] Speaker 03:
I don't understand.

[00:08:38] Speaker 03:
Why would we remand it back to her if we simply dismiss this?

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Can't you file some sort of

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motion with the district court at that point asking her to vacate.

[00:08:48] Speaker 00:
There's a rule 60 motion that we could file.

[00:08:50] Speaker 03:
So then why do you need us to remand it?

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My understanding of the second line of cases that deals with volitional... Because I'll just tell you, I don't think she should vacate her judgment.

[00:09:02] Speaker 03:
So why in the world would I send it back and tell her to look at whether to vacate her judgment when you obviously do want her to vacate her judgment, but

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And you have at your own disposal another mechanism, Rule 60, to seek that vacator.

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Why would our court impose on her to consider something that I don't understand why she should be considering?

[00:09:24] Speaker 00:
I see.

[00:09:25] Speaker 00:
I understand.

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And maybe I misunderstood the question.

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I don't think there needs to be an instruction from this court for her to reconsider.

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I think we can take it.

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We can avail ourselves of that mechanism.

[00:09:33] Speaker 03:
So it simply ruled that the appeal is dismissed and that we

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will not order.

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You asked us to vacate.

[00:09:46] Speaker 03:
We're not going to vacate, but I don't see why we would alternatively order a remand and sort of force her to consider vacating.

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You have the ability to cause that to happen on your own.

[00:09:56] Speaker 03:
I don't know why that's a role we should play.

[00:10:00] Speaker 00:
And I don't disagree with that, Your Honor.

[00:10:01] Speaker 00:
I think it's appropriate for us to exercise that mechanism.

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I do want to say, however, we're in a

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We're in a bit of a catch-22 here.

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Obviously, there's a 285 motion that we're confronted with.

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Had we not given Truven a covenant not to sue, I had concerns that our client would be under the pall of another potential fee motion, because the Supreme Court decision, from our perspective, very clearly applies to this case as well.

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Truven, in its own briefing, admits that the interpretation of the claim that was adopted by the Federal Circuit

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is dispositive of the infringement issue in this case.

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So from our perspective, the covenant that we issued was just reinforcement.

[00:10:45] Speaker 03:
Well, the fact that they admitted, of course they admit it.

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They don't want to be found to infringe.

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That doesn't bind us or any other court.

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And if you didn't agree with that notion, you would be able to assert that patent against them.

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And they can make the arguments.

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And it would be resolved by a court.

[00:11:01] Speaker 03:
But why don't you move on?

[00:11:02] Speaker 03:
You don't have much time left.

[00:11:03] Speaker 03:
And I'd like you to address your attorney's fees argument.

[00:11:05] Speaker 03:
Yes, Your Honor.

[00:11:06] Speaker 03:
No matter what we do with the dismissal, that's just severing one of the cases and the other two deal with the attorney's fees, correct?

[00:11:17] Speaker 00:
The 285 issue still is present in either circumstance.

[00:11:20] Speaker 00:
Yes, Your Honor.

[00:11:21] Speaker 00:
I guess just some really quick points about the 285 motion.

[00:11:23] Speaker 00:
I know I'm already in the middle of battle time.

[00:11:26] Speaker 00:
Number one, I think it's important to recognize that this is a very, from our perspective, a very rare circumstance that we're dealing with.

[00:11:34] Speaker 00:
I've been litigating patent cases for a long time.

[00:11:36] Speaker 03:
OK.

[00:11:36] Speaker 03:
Well, I don't care about that.

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So your personal experience is not evidence that I consider relevant.

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So keep it to yourself.

[00:11:43] Speaker 03:
But why don't we move forward to the only issue I really have, which is the four months between the period of time when you notified them of your intent to withdraw the 981 from the suit and then your actual withdrawal.

[00:11:56] Speaker 03:
First off, why didn't you do it in a more timely fashion?

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I mean, the district court seemed to have said, well, shame on you.

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She seems to have taken the approach that you may have notified them of your intent to do so, but then you didn't do it.

[00:12:10] Speaker 03:
And that may well have caused them to have to continue to work on cases.

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I mean, I have some personal experience, too.

[00:12:17] Speaker 03:
And even though you have a tentative settlement in

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Orally, until it's in writing, you don't stop working the case because the deadlines are still coming.

[00:12:24] Speaker 00:
Sure.

[00:12:25] Speaker 00:
Two things.

[00:12:26] Speaker 00:
One, they did stop working the case because they stopped serving discovery related to that patent.

[00:12:29] Speaker 00:
From my perspective, there was no dispute that that was not in the case any longer.

[00:12:33] Speaker 03:
And so I understood that from page 26 of your brief.

[00:12:37] Speaker 03:
And I read the appendices portions for the ESI discovery, and I think I completely agree with you.

[00:12:45] Speaker 03:
Are you convinced that 25% of, for example, all discovery that took place during that four months was assessed against your client?

[00:12:53] Speaker 00:
That's our understanding.

[00:12:54] Speaker 00:
And the real problem here is that by this court's own jurisprudence, we should have the opportunity to review the time records.

[00:13:00] Speaker 00:
Not to burden the court with that, but we should have the opportunity to review the time records that were never even produced.

[00:13:07] Speaker 00:
I'm in a position of not being able to.

[00:13:09] Speaker 03:
Well, what concerned me was the 17 time entries that were produced, more than half of them had calculation errors in them that all interred to the benefit of your opponent.

[00:13:18] Speaker 03:
And I mean, sloppiness aside, you know, but you didn't appeal, you didn't raise that argument with the district court.

[00:13:24] Speaker 03:
So I don't see why I would address it now for the first time on appeal.

[00:13:27] Speaker 00:
The principal issue here, from my perspective, is twofold.

[00:13:31] Speaker 00:
One, we should have seen the time records.

[00:13:32] Speaker 00:
There are no cases cited that I'm aware of in which time records weren't produced and fees were limited.

[00:13:36] Speaker 03:
But they offered to produce them in camera, and why did the district court not do that?

[00:13:41] Speaker 00:
Frankly, because I'm sure she's overburdened with work.

[00:13:43] Speaker 00:
The role from the Federal Circuit's decisions in this case, the Federal Circuit's decisions in this area,

[00:13:48] Speaker 00:
It's the party's role to evaluate those and to police those and to present our opposing view as to what an appropriate fee apportionment would be.

[00:13:57] Speaker 00:
We were robbed of that ability because we couldn't ever see the fees.

[00:14:00] Speaker 00:
That's number one issue.

[00:14:02] Speaker 03:
I don't know how sympathetic I am because actually the billable rates are incredibly low.

[00:14:06] Speaker 03:
I bet the associates at your firm bill as much, if not more, than the partners at their firm do for the same number of hours of work.

[00:14:12] Speaker 00:
Considerably more.

[00:14:14] Speaker 00:
Our rates are even lower, actually.

[00:14:15] Speaker 03:
Really?

[00:14:16] Speaker 00:
Yes, Your Honor.

[00:14:17] Speaker 00:
Yeah, I think my rate's $400 something dollars an hour.

[00:14:21] Speaker 00:
The second issue, other than not having the actual time records, is there are certain aspects of the case that they were allowed to recover fees for, specifically in that four-month period.

[00:14:35] Speaker 00:
We gave them a draft covenant.

[00:14:36] Speaker 00:
We said we weren't asserting it.

[00:14:37] Speaker 00:
The only fight we were having is about the appropriate mechanism.

[00:14:41] Speaker 03:
See, my problem is I am troubled by the fact that they produced

[00:14:46] Speaker 03:
an $800,000 number with no detailed articulation of why.

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And I'll tell you, they get their fees.

[00:14:53] Speaker 03:
You're not going to convince me that they're not entitled to fees.

[00:14:55] Speaker 03:
The only concern I have is from the time period after which you notified them that you were no longer going to assert the 981.

[00:15:02] Speaker 03:
It does appear, at least from the record evidence you've produced, that, for example, none of the discovery pertained to the 981 after that.

[00:15:09] Speaker 03:
So why is the 25% rule of thumb

[00:15:11] Speaker 03:
still applying to that period of time, that seems to me potentially inconsistent with Fox.

[00:15:15] Speaker 03:
So I'm not sure.

[00:15:17] Speaker 03:
But then also, let me tell you, the only person who gets rich if I vacate and send this back is you and the other law firm.

[00:15:22] Speaker 03:
Why?

[00:15:22] Speaker 03:
Because we're talking about a very small number in the scheme of things.

[00:15:25] Speaker 03:
25% of whatever the billables were over that four hours.

[00:15:29] Speaker 03:
And how many hours is it going to take the two of you to fight over that at the district court if I send it back for that reason?

[00:15:35] Speaker 03:
I feel like only your client loses if I do that.

[00:15:38] Speaker 03:
I'm not positive it's what I should do legally.

[00:15:40] Speaker 03:
But if I do do it, the only people who lose are the clients, because both sides of you are going to continue to bill your clients to fight over that small four-month window of time.

[00:15:49] Speaker 03:
And you're going to want their detailed billable rates.

[00:15:53] Speaker 03:
And then you're going to take hours reviewing them and scrutinizing them.

[00:15:56] Speaker 03:
I don't know what good comes from any of that.

[00:15:59] Speaker 00:
I agree with you entirely.

[00:16:00] Speaker 00:
I think that that four-month period, at a bare minimum, that four-month period should be out.

[00:16:05] Speaker 00:
We very clearly said we were going to withdraw that.

[00:16:07] Speaker 03:
But you didn't withdraw it.

[00:16:09] Speaker 03:
And the district court has a point, which means the fact that you told them you're going to withdraw it doesn't prove that they stopped working on it after that.

[00:16:17] Speaker 03:
And a lot of law firms wouldn't stop working on it after that.

[00:16:20] Speaker 03:
You've proven that for certain entries, like discovery, it appears they didn't work on it in that regard.

[00:16:26] Speaker 03:
But we don't know what other entries exist during that four-month period.

[00:16:30] Speaker 03:
So you're not going to get me to say no fees after that time.

[00:16:34] Speaker 03:
So what am I going to do?

[00:16:35] Speaker 03:
I'm going to send it back to the district court to conduct a mini trial on all the billables that took place line item by line item over that four month period.

[00:16:43] Speaker 03:
I feel like that's what Fox wants.

[00:16:45] Speaker 01:
Can you just clarify, after you knew it was crystal clear that you had asserted an invalid patent,

[00:16:55] Speaker 01:
Why did it take four months to withdraw that from the complaint?

[00:16:59] Speaker 00:
We were following Ninth Circuit precedent, proposing a mechanism to withdraw it by amending our complaint, which is what the Ninth Circuit says we have to do.

[00:17:06] Speaker 00:
True and refused to accept that approach and argued for a different approach.

[00:17:09] Speaker 00:
The thing that we offered at the October beginning date is a more generous offer than what the court ultimately ordered us to enter.

[00:17:19] Speaker 00:
and four months later.

[00:17:20] Speaker 00:
We were proposing a mechanism based on all the research we had.

[00:17:23] Speaker 03:
When you say proposing, you didn't file it.

[00:17:25] Speaker 03:
You didn't file an amended complaint that eliminated the 981.

[00:17:30] Speaker 00:
Because we wanted to do it with an agreement with the other side, Your Honor.

[00:17:33] Speaker 00:
And that is partially what motivated our decision down the road to issue the Covenant on the appeal instantly, because we didn't want to be in a situation where we failed to give the Covenant

[00:17:45] Speaker 00:
and then be penalized for it, which is what happened in this circumstance.

[00:17:48] Speaker 00:
We were genuinely trying to withdraw this.

[00:17:50] Speaker 03:
So here's my question.

[00:17:50] Speaker 03:
Shouldn't they legitimately be able to recoup the attorney's fees that were expended to come to a settlement with you over how the 981 should be extricated?

[00:18:02] Speaker 03:
Why isn't that part of them being forced to continue

[00:18:07] Speaker 03:
to do work on this 981 patent that was at all times invalid.

[00:18:11] Speaker 00:
They clearly stopped doing work on the 981.

[00:18:13] Speaker 03:
No, this was work.

[00:18:15] Speaker 03:
Negotiating with you over what form your withdrawal will take is work.

[00:18:22] Speaker 00:
I agree.

[00:18:23] Speaker 03:
So shouldn't they be able to recoup their fees?

[00:18:26] Speaker 03:
If I believe they should recoup their fees for the 981, any work on the 981, and the district court believes that, that's work on the 981, and that was occurring during that four-month period.

[00:18:36] Speaker 03:
They should be able to recoup that.

[00:18:38] Speaker 00:
But not all of the other discovery in the case.

[00:18:41] Speaker 00:
And the problem is, the case was going like this as far as workload.

[00:18:43] Speaker 00:
Discovery was ramping up and everything.

[00:18:45] Speaker 00:
And it ramped up during that four-month period when we had already said, we're not going to assert this patent against you.

[00:18:51] Speaker 00:
And they were not conducting discovery and depositions on those issues.

[00:18:55] Speaker 03:
The district court excluded most depositions, didn't he?

[00:18:58] Speaker 03:
No, your honor.

[00:18:58] Speaker 03:
Or she?

[00:18:59] Speaker 00:
No?

[00:18:59] Speaker 00:
No, your honor.

[00:19:00] Speaker 00:
I don't have any accounting to know how much of the money went into depositions and discovery review, et cetera.

[00:19:05] Speaker 03:
All right.

[00:19:05] Speaker 03:
OK.

[00:19:06] Speaker 03:
Okay, we are way over time.

[00:19:08] Speaker 03:
Is it okay with you if I move on?

[00:19:10] Speaker 03:
All right, let's hear from opposing counsel and I'll restore two minutes of rebuttal time.

[00:19:19] Speaker 03:
On the next case, you get less time because of this.

[00:19:22] Speaker 03:
Just kidding.

[00:19:23] Speaker ?:
Go ahead.

[00:19:25] Speaker 02:
Good morning, Your Honors, and may it please the Court.

[00:19:27] Speaker 02:
I'm Karen Boyd.

[00:19:27] Speaker 02:
I represent the Defendant FLE Truven Health Analytics.

[00:19:30] Speaker 02:
And with me at council table is my partner.

[00:19:32] Speaker 03:
So I don't know where you're planning on starting, but I would just love for you to go right to the last issue.

[00:19:37] Speaker 03:
If you don't mind that I was discussing, probably you can circle back to whether there should be a vacate or anything like that.

[00:19:46] Speaker 03:
I certainly don't want to use up all your time, but could you start with that last four month period of time?

[00:19:50] Speaker 02:
Yeah.

[00:19:50] Speaker 02:
So in that four month period of time, and this is exactly why we went with a 25% overall, because it balances

[00:19:59] Speaker 02:
ramping down a bit on discovery because it was... Not ramping down.

[00:20:03] Speaker 03:
Did you have any discovery during that four-month period of time that pertained to the 981 patent?

[00:20:09] Speaker 03:
That pertained particularly to the 981?

[00:20:11] Speaker 02:
Correct.

[00:20:11] Speaker 02:
And exclusively?

[00:20:12] Speaker 02:
No.

[00:20:13] Speaker 03:
So zero discovery occurred during that four-month period of time pertained exclusively to the 981?

[00:20:18] Speaker 03:
Because that's all you can get under FOX.

[00:20:20] Speaker 03:
You can't get it if it was duplicative of what you had to do for the other patent.

[00:20:23] Speaker 02:
So there is this underlying issue, and there are two related patents in a case.

[00:20:28] Speaker 02:
of any time you are doing something that seems to apply equally to both, it might not.

[00:20:34] Speaker 02:
So you need to keep your eye on is there anything different between the 726 and the 981 that means that a different outcome comes out of it.

[00:20:45] Speaker 02:
So even when you conclude, no, they are the same, there is this underlying work of making sure that that is the case and knowing when they're different and when they're the same.

[00:20:56] Speaker 02:
to that extent, had the 981 not come out of the case ultimately and had we gone forward.

[00:21:01] Speaker 03:
Is there anything different in discovery you would have done or that you can point to, any discovery entry anywhere in your billables or anything in your recollection with regard to discovery during that four-month period that you would not have had to have done if they had actually already withdrawn the 981?

[00:21:17] Speaker 03:
Not to my recollection.

[00:21:19] Speaker 02:
However, there was substantial work that we needed to do in negotiating and dealing with the issue of

[00:21:25] Speaker 02:
the covenant and how do we get rid of this?

[00:21:27] Speaker 02:
Agreed.

[00:21:27] Speaker 03:
And he pretty much agreed to that.

[00:21:29] Speaker 02:
And so instead of going through an item by item on discovery and teasing all of those out an item by item on the on the covenant and the negotiations and the, we wanted to be in a position to be the prevailing party so that we could make an ultimately a fees motion.

[00:21:45] Speaker 02:
We did 25% of that and 25% of the discovery.

[00:21:49] Speaker 02:
That's where the 25% across these things came, came from.

[00:21:52] Speaker 02:
And that's an example.

[00:21:54] Speaker 02:
of why 25% is ultimately a fair result.

[00:21:58] Speaker 02:
And you know what?

[00:21:58] Speaker 03:
That would be entirely appropriate, it seems to me, if they or the court had looked at your bills and were able to see that you spent a lot of time on this covenant and stuff and that you spent a lot of time on discovery and overall 25%.

[00:22:16] Speaker 03:
I would have no problem with

[00:22:19] Speaker 03:
that if some underlying analysis had taken place of your bills, but all the court below had was a representation from you that we spent $800,000 litigating this case and we want 25% of it, there's nothing particular to that four-month period of time that I can see that would have justified her giving you the 25%.

[00:22:42] Speaker 03:
It may well be justified.

[00:22:44] Speaker 03:
But I don't see that she had in front of her the kinds of evidence that would satisfy what Judge Kagan seemed to require in Fox.

[00:22:51] Speaker 02:
What Judge Ilston had in front of her was when you look at the case as a whole, which she was tremendously familiar with, she was the judge and she handled discovery motions in this case.

[00:23:03] Speaker 02:
There wasn't a magistrate.

[00:23:04] Speaker 02:
So the entire case was under her supervision.

[00:23:07] Speaker 02:
And she knew we had information about how many claim terms were unique to the 981, how many

[00:23:13] Speaker 02:
pieces of prior art were unique to the 981.

[00:23:16] Speaker 02:
She had that information.

[00:23:17] Speaker 03:
She had... And that's all relevant, but not during the four-month period.

[00:23:22] Speaker 03:
That's not relevant during that four-month period.

[00:23:25] Speaker 03:
That's what I'm struggling with.

[00:23:27] Speaker 02:
Again, she had her personal experience and knowledge of the case, and she had the declarations from each attorney.

[00:23:35] Speaker 02:
And each of us, I went through my own bills for the entire case.

[00:23:39] Speaker 02:
Ms.

[00:23:39] Speaker 02:
Vago went through her own bills for the entire case.

[00:23:41] Speaker 02:
And we took all of this into account.

[00:23:46] Speaker 03:
And we gave... Well, it's great that you did, but you didn't provide them to the other side, nor did the judge review them.

[00:23:52] Speaker 03:
So she's literally just accepting your word for all of that.

[00:23:57] Speaker 02:
And her experience with what the issues were that were being dealt with in those moments.

[00:24:02] Speaker 03:
But she didn't articulate anything that I can review with regard to that.

[00:24:06] Speaker 03:
Like, you're saying that

[00:24:09] Speaker 03:
She had some experience of what was occurring during that four-month period that maybe informed her decision that 25%, including during that four-month period, is still justified.

[00:24:18] Speaker 03:
But she didn't articulate any reasons or bases for that, in her opinion, that I can find.

[00:24:23] Speaker 02:
There were not separate reasons for that particular window.

[00:24:26] Speaker 02:
Still under the abuse of discretion standard, I believe that she exercised her discretion in a way consistent with the Fox decision.

[00:24:40] Speaker 03:
What would happen if, I dread saying this, what would happen if I didn't think that it was supported under FOX and if I thought that four-month window had to go back for some sort of reasoned analysis because they did tell you that they were no longer going to pursue the 981 and it appears from the discovery at roughly page 5,400 in the appendices

[00:25:07] Speaker 03:
that no more e-discovery, for example, took place on anything related to the 981, and their allegation is a lot of the discovery took place in this four-month window.

[00:25:17] Speaker 03:
What would happen if I sent it back and told her, do just some sort of meaningful analysis, given that it does appear that you stopped working on the merits of any sort of case regarding the 981, but of course you had to deal with the Covenant and negotiate with them whether an amended complaint or a Covenant was sufficient

[00:25:36] Speaker 03:
That does seem to be time, all of which should be compensated.

[00:25:39] Speaker 02:
I'm sure that Judge Ilson would follow your instructions and would engage in that.

[00:25:43] Speaker 02:
There would be briefing from both parties on that issue.

[00:25:47] Speaker 03:
And how much money are we even talking about?

[00:25:51] Speaker 03:
I mean, I know it's not in the record, OK?

[00:25:55] Speaker 03:
But we're talking about a four-month period of the litigation, and the total billables are only $800,000, and 25% of that's only $200,000.

[00:26:02] Speaker 03:
How much money are we even talking about?

[00:26:05] Speaker 03:
if we were to try to focus on that four months.

[00:26:08] Speaker 03:
You don't know.

[00:26:08] Speaker 03:
That's OK.

[00:26:09] Speaker 03:
I'm afraid I don't know.

[00:26:10] Speaker 03:
How many months in total are we talking about?

[00:26:12] Speaker 02:
In total, it was 21 months of litigation.

[00:26:14] Speaker 02:
It was looking at the last four months.

[00:26:17] Speaker 02:
My guess, based on my memory of the case and my knowledge of how I run cases, is that we would probably be looking at total bills for those four months in the $200,000 to $300,000 range.

[00:26:31] Speaker 02:
But that is basically a guess.

[00:26:34] Speaker 03:
Yeah, I get it.

[00:26:35] Speaker 03:
OK.

[00:26:35] Speaker 03:
Would you turn to the issue of whether or not we should grant a motion to dismiss and whether or not we should order the 101 decision to be vacated?

[00:26:48] Speaker 02:
Certainly, Your Honor.

[00:26:50] Speaker 02:
So here, because of the covenant not to sue, I think there's no question that the appeal is moot and should be dismissed.

[00:26:55] Speaker 02:
So if we look at the Supreme Court precedent and precedent from this court on the question of vacating the underlying 101 decision, that's really where

[00:27:05] Speaker 01:
I guess it comes down to whether the January 5 cert denial and the other litigation, where our court issued a claim construction adverse to Cave, rendered this controversy between you and Cave moot and extinguished it because there was no longer any viable infringement theory.

[00:27:30] Speaker 01:
So yes, they issued a covenant not to sue February 25,

[00:27:34] Speaker 01:
week and a half ago, but nevertheless, two months ago, there was potentially a mooting event with the final resolution of the claim construction debate.

[00:27:45] Speaker 02:
And that final decision from the Supreme Court denying certiorari didn't constitutionally moot our dispute.

[00:27:54] Speaker 02:
That was a decision that related to a different patent.

[00:27:57] Speaker 02:
It related to a different party with a different product.

[00:28:01] Speaker 01:
And although- I guess in terms of issue preclusion, though, against the patent owner, against CAVE, it's a different claim, different patent, but it's the same claim limitation, isn't it?

[00:28:14] Speaker 02:
It is the same claim limitation, or the same claim construction issue is what I will say.

[00:28:20] Speaker 02:
And we can tell that it doesn't constitutionally moot, and it doesn't actually resolve our dispute.

[00:28:28] Speaker 02:
It does make my case a heck of a lot easier to win at the district court level.

[00:28:32] Speaker 02:
I will say this claim construction, I believe, applies to the 726 patent asserted against Truven.

[00:28:39] Speaker 02:
And I believe that under that construction, Truven doesn't infringe.

[00:28:43] Speaker 02:
But no court has held that.

[00:28:45] Speaker 02:
And you can tell that it doesn't constitutionally moot the issue, because the same claim construction issue exists in the 981 patent, which is asserted against HCSC, who will be arguing

[00:28:58] Speaker 02:
in five minutes and 29 seconds.

[00:28:59] Speaker 01:
That's a different claim limitation, though, isn't it?

[00:29:03] Speaker 01:
It's not identical, like the one we've got here and the one in that other case where the cert got denied.

[00:29:10] Speaker 02:
Right.

[00:29:10] Speaker 02:
The claim construction issue is the same.

[00:29:12] Speaker 02:
The claim language is different.

[00:29:15] Speaker 02:
But the issue that the panel in the Optum Insight case looked at was, does the specification support a claim

[00:29:26] Speaker 02:
that covers both direct and indirect standardization.

[00:29:29] Speaker 02:
And that panel said, no, this specification doesn't support that.

[00:29:33] Speaker 02:
These claims are limited to indirect standardization only.

[00:29:37] Speaker 02:
That same specification issue is in the 726 patent and in the 981 patent.

[00:29:47] Speaker 01:
Yes, but as I understand it, because that other patent has different claim language, we don't know if a construction of that

[00:29:55] Speaker 01:
claim language with other words might actually encompass this other version of standardization.

[00:30:00] Speaker 02:
And that is CAFE Consulting's position in the 981 patent.

[00:30:05] Speaker 02:
They're conceding for the 726 patent, but they're not conceding for the 981 patent.

[00:30:10] Speaker 02:
But the issue is still alive in both of those patents.

[00:30:13] Speaker 01:
I don't know if it's an answer to ask us to look at some other litigation to try to figure out whether there was a mooting event in this litigation.

[00:30:23] Speaker 01:
I mean, what we have to figure out is it's the same claim language.

[00:30:29] Speaker 01:
And the claim language for that other case got an adverse ruling for the patent owner.

[00:30:37] Speaker 01:
So why wouldn't that follow here in your case?

[00:30:40] Speaker 02:
Well, that issue's not been briefed to any court.

[00:30:43] Speaker 02:
It's not been decided by any court.

[00:30:45] Speaker 02:
Are the products identical that were an issue in the two litigations?

[00:30:48] Speaker 02:
Products are entirely different.

[00:30:50] Speaker 03:
So it could be that that claim construction might have some slightly different argument vis-a-vis your product.

[00:30:55] Speaker 03:
Maybe they had a DOE argument for your product.

[00:30:57] Speaker 03:
They didn't have it.

[00:30:58] Speaker 03:
And we don't know.

[00:30:59] Speaker 03:
It's not litigated.

[00:30:59] Speaker 02:
We don't know any of those issues.

[00:31:01] Speaker 02:
Different products.

[00:31:01] Speaker 02:
Different products.

[00:31:02] Speaker 02:
Different companies developed different products.

[00:31:04] Speaker 01:
And the patent specifications are different, too.

[00:31:07] Speaker 01:
Is that right?

[00:31:08] Speaker 02:
Is this a CIP?

[00:31:10] Speaker 02:
The 981 is a CIP of the 126.

[00:31:14] Speaker 02:
The additional matter in the specification doesn't relate to this claim construction issue.

[00:31:18] Speaker 02:
So in relevant ways, the specification in the 126 and the 981 are identical.

[00:31:24] Speaker 02:
The 726, for our case, the Truven case, is the grandchild of the 981 patent.

[00:31:30] Speaker 02:
And they are continuations.

[00:31:33] Speaker 02:
And so those specifications, the 981 specification and the 726 specification, are identical except for the preliminary information about continuations.

[00:31:45] Speaker 03:
Do you have anything else you want to cover?

[00:31:49] Speaker 02:
I think we're good.

[00:31:49] Speaker 02:
Check my notes, but when a judge tells me to sit down, I usually follow that.

[00:31:56] Speaker 02:
Thank you, Your Honors.

[00:31:57] Speaker 02:
I hope Judge O'Malley is okay.

[00:31:59] Speaker 02:
Okay, thank you very much.

[00:32:00] Speaker 03:
Well, she's listening to this argument right now, so she heard your words.

[00:32:04] Speaker 03:
Okay, Mr. Brophy, you have two minutes for rebuttal.

[00:32:09] Speaker 00:
Thank you, Your Honor.

[00:32:10] Speaker 00:
I just maybe want to say two very quick things.

[00:32:13] Speaker 00:
The decision by the Federal Circuit was not a question of whether the specification had support for a particular scope of invention.

[00:32:23] Speaker 03:
It was a plain and ordinary meaning interpretation of a specific... Yeah, but a different specification may cause you not to utilize a plain and ordinary meaning, and sometimes there can be multiple plain meanings for something, and the spec informs which one of them to look to.

[00:32:37] Speaker 03:
There are reasons that

[00:32:38] Speaker 03:
the spec could cause it to come out differently from one time to another.

[00:32:42] Speaker 00:
So the Federal Circuit's decision was that this weighting term was limited to specifically indirect standardization, which is not what Optum Insight did in that case.

[00:32:53] Speaker 00:
And also, if you look at footnote six, Truven says, we're the same.

[00:32:57] Speaker 00:
We don't use that type of standardization either.

[00:32:58] Speaker 03:
Well, of course they say that, because they want you to agree to not infringement.

[00:33:02] Speaker 03:
They're not going to say something contrary to that.

[00:33:04] Speaker 03:
But a court has to decide it.

[00:33:05] Speaker 03:
It's not the same.

[00:33:07] Speaker 00:
From my perspective, number one, there's no dispute because from discovery in the Truman case, we determined that they do use an identical type of weighting to what we lost in Optum.

[00:33:17] Speaker 00:
And I was genuinely concerned that if we were to press these kinds of issues, it would be considered an objectively baseless claim because of what we had gone through with Optum.

[00:33:28] Speaker 03:
I don't think that... And maybe it would have, but that still doesn't mean that the flip side is you get a pizza pie along with a vacateur.

[00:33:36] Speaker 03:
Like, you're right.

[00:33:37] Speaker 03:
Maybe had you pursued the claims with your understanding of the lack of strength that they had given the notion of the infringing products, you might well have ended up getting sanctioned or something.

[00:33:48] Speaker 03:
Who knows?

[00:33:49] Speaker 03:
But that doesn't mean that this court should vacate the lower court's decision on 101 related to the baton.

[00:33:55] Speaker 03:
I mean, those two things don't seem entirely linked to me.

[00:33:58] Speaker 00:
All I can say is we're talking about an identical specification for purposes of this issue.

[00:34:02] Speaker 00:
We're talking about a Federal Circuit decision construing the exact same claim term, and we're talking about an undisputed, no disputed fact regarding that the prior defendant's product and the present defendant's product work in exactly the same way with respect to that issue.

[00:34:17] Speaker 00:
And so from my perspective, we had nowhere to go but to resolve the case.

[00:34:22] Speaker 00:
And I think unless you have any specific questions, I won't spend any more of your time.

[00:34:26] Speaker 03:
That sounds good.

[00:34:26] Speaker 03:
Let's move on to our next case.

[00:34:27] Speaker 03:
I think both counsel, the case is taken under submission.

[00:34:30] Speaker 03:
Our next case is