[00:00:49] Speaker 04:
Good morning, your honor.

[00:00:50] Speaker 04:
It's Lionel Avenue from Finnegan for the TCL Appellants.

[00:00:53] Speaker 04:
We have three issues this morning in our appeal that are most important.

[00:00:58] Speaker 04:
One is the 101 issue and eligibility.

[00:01:00] Speaker 04:
Two is the issue of damages and its proper computation.

[00:01:04] Speaker 04:
And three is willfulness.

[00:01:05] Speaker 04:
If the first issue is resolved, then there's no need to go to the two other issues, so I'll take the first issue first.

[00:01:12] Speaker 02:
Here, on the issue... Can you speak first about the waiver of the 101 issue?

[00:01:16] Speaker 04:
Yes, Your Honor.

[00:01:17] Speaker 04:
We believe that the waiver issue has now been resolved by the SRI decision.

[00:01:21] Speaker 02:
In SRI, the court found that if there is a... Well, which circuit law applies here?

[00:01:27] Speaker 02:
Federal Circuit law or Fifth Circuit law?

[00:01:30] Speaker 04:
We believe that it's the Federal Circuit law that applies and that that was the law that was applied in SRI.

[00:01:35] Speaker 04:
From our reading of footnote number five in SRI,

[00:01:37] Speaker 04:
The court sided to three circuits for the review of a Third Circuit case and they sided first to the Federal Circuit case law in United Tech, second to the Seventh Circuit case law and third to the Tenth Circuit case law.

[00:01:51] Speaker 04:
There was no citation to the Third Circuit in that ruling, which was a ruling on a case from the Third Circuit.

[00:01:57] Speaker 02:
So it appears to us that... Do you think it was a contested issue?

[00:02:01] Speaker 02:
In SRI as to which circuit law applies on this kind of procedural question of, you know, what does it take to preserve an argument in a denial of a summary judgment?

[00:02:15] Speaker 04:
It certainly does not appear that it was the direct issue that is in this case, where it is disputed as to which circuit law applies, the appellee claiming that it's the Fifth Circuit.

[00:02:25] Speaker 04:
But we believe that because we're talking about the issue of a review of summary judgment on 101,

[00:02:31] Speaker 04:
that that is an issue particular to Federal Circuit law.

[00:02:34] Speaker 04:
That's not an issue that the Fifth Circuit would ever consider because it's Section 101.

[00:02:39] Speaker 04:
Whether or not you have to file a JMO on Section 101 when you had a previous motion for summary judgment on 101 that had a final ruling, we believe that that would bring it within the Federal Circuit case law of Aeroproducts and Accenture, both of which say that it is an issue that's particular to the Federal Circuit that Federal Circuit law would apply.

[00:03:00] Speaker 04:
However, even if we are wrong and we're misreading SRI, we believe that we would still win even applying Fifth Circuit law.

[00:03:08] Speaker 04:
Fifth Circuit law, there is of course the fell decision, which was brought to light during the briefing, but the fell decision did not overrule Hudson and Wynn, and both of those Fifth Circuit cases support our position that if you have a ruling on a motion for summary judgment,

[00:03:23] Speaker 04:
and that there's a final ruling on that, that you do not have to bring that up again on JMAAL in order to have a decision reviewed by the appellate proceeding.

[00:03:33] Speaker 04:
So either under the Federal Circuit case law or under the Fifth Circuit case law, we would submit that we are fine under the waiver issue, but specifically under SRI that we are... Those other Fifth Circuit cases, the ones that are not felled,

[00:03:50] Speaker 02:
The issue that got denied summary judgment, was that an issue that was different than the issue that went to the jury?

[00:03:59] Speaker 02:
For example, in Feld, I think it was a contract question that was resolved, that was addressed at summary judgment and then continued on and went to the jury.

[00:04:11] Speaker 02:
Here we have a 101 issue.

[00:04:15] Speaker 02:
But then we have all these other issues that actually went to the jury that are not 101.

[00:04:20] Speaker 02:
Completely separate and distinct from 101.

[00:04:23] Speaker 02:
Infringement, willfulness, damages, etc.

[00:04:26] Speaker 02:
So what I'm trying to figure out about these Fifth Circuit cases that you're pointing to that are not filled, were they more like our fact pattern here where it was a separate and distinct issue that was addressed at summary judgment apart from all the issues that were addressed and resolved at the jury trial?

[00:04:44] Speaker 04:
We do read at least Hudson that way, Your Honor, but also the other key part is that in Hudson, since it wasn't a patent issue, then that also makes it completely different from anything that we would find in the Fifth Circuit because they simply have not addressed 101.

[00:04:59] Speaker 04:
So we would find that Hudson completely supports us.

[00:05:03] Speaker 04:
Wynn is not directly on point, but it does show that there was no waiver applied, but it doesn't go into the substance that Hudson does.

[00:05:10] Speaker 04:
So we believe that Hudson does provide that outlet to fell that we're looking for if the circuit law does apply.

[00:05:18] Speaker 04:
But if we do survive the waiver issue, Your Honor, then we would get to the substance of 101, and we believe that there's basically three reasons why we would find these patent claims to be eligible.

[00:05:28] Speaker 04:
There's only two claims at issue, and the two claims first is that there was a nose of wax issue, and basically in the 101 argument that was made by

[00:05:39] Speaker 04:
Erickson to the court and trying to overcome the 101 ruling on motion for summary judgment.

[00:05:44] Speaker 04:
There was an argument that these claims were to be construed narrowly, that there was a middleware, there was a layered architecture and other specific items that came from the IPR proceedings and they were saying, so you should, you know, your honor,

[00:05:57] Speaker 04:
Judge Payne, you should consider these very narrowly.

[00:06:00] Speaker 04:
However, when the claims were taken to the jury, the nose of wax was completely changed, and that the same arguments were widened out, and the jury was told, well, no, you don't have to necessarily find middleware.

[00:06:13] Speaker 04:
It's in the title of the patent.

[00:06:15] Speaker 04:
It's not in the claims.

[00:06:16] Speaker 01:
Do you understand the difficulty that we have on appellate review of something like that?

[00:06:19] Speaker 01:
I mean, the district court decided the 101 issue as a threshold issue properly, and no one's challenging that.

[00:06:27] Speaker 01:
And he relied, rightly or wrongly, but even, let's assume it's right, on the IPR.

[00:06:35] Speaker 01:
There's not much analysis in his 101 opinion, but one of the things he seems to have relied on heavily is the PTOs, what he calls the PTABs, highly technical characterization of the claims.

[00:06:48] Speaker 01:
So is it your view that he was just wrong to rely on that?

[00:06:53] Speaker 01:
It's kind of harder for me to absorb.

[00:06:55] Speaker 01:
Well, he may have been right, but then it turned out at trial that the issues kind of changed.

[00:07:02] Speaker 01:
And that's just really hard for me to sort of absorb.

[00:07:05] Speaker 01:
But that seems to be your argument, right?

[00:07:08] Speaker 01:
Are you conceding that he may have been right if they stopped there, but he's not right because during the trial here and what they presented to the jury, they changed their theory from what it had been before the PTAS?

[00:07:22] Speaker 04:
We're not saying that the judge was right, we're just pointing out the inconsistency of the arguments by Erickson.

[00:07:27] Speaker 04:
As far as the judge is ruling, the judge we believe got it wrong in two ways.

[00:07:32] Speaker 04:
One, the judge kept repeating the fact that the Patent Office, the PTO, had already reviewed the claims and found them to be patentable.

[00:07:41] Speaker 04:
But of course, 101 was not subject to review at the Patent Office.

[00:07:45] Speaker 04:
So that's one of the things that we're not sure that the court

[00:07:47] Speaker 04:
fully understood.

[00:07:49] Speaker 04:
Secondly, the court also talked about the technical words that were in the claim, and he said, well, there's so many technical words, it must be eligible.

[00:07:58] Speaker 04:
Well, that goes against Smart Systems and all the case law of this court, which is technical jargon, technical words alone cannot make a claim eligible.

[00:08:07] Speaker 04:
You have to go beyond what the technical words are.

[00:08:09] Speaker 04:
And then when we look at the inconsistency in how the claims were interpreted by Erickson between the 101 motion and the jury,

[00:08:17] Speaker 04:
That confirms what we're explaining, which is these technical words, when you look at them all, they fall together into one thing, and that is access.

[00:08:26] Speaker 04:
There's a picture in our brief of having a doorway.

[00:08:29] Speaker 04:
You come up to the doorway, you let the door open, you have the door closed.

[00:08:32] Speaker 04:
There are basically four main elements in the claims.

[00:08:35] Speaker 04:
There's an access controller, an interception module, a decision entity, and a security access manager.

[00:08:41] Speaker 04:
The claims themselves say that two of these four elements are the same.

[00:08:46] Speaker 04:
That is, the security access manager and the decision entity.

[00:08:49] Speaker 04:
And this is explained in Appendix 134, which was before the jury.

[00:08:54] Speaker 04:
However, also interestingly, the expert when explaining the claims to the jury said that the interception module and the decision entity could also be combined and be the same, and that's Appendix 1231.

[00:09:06] Speaker 04:
So when we take all of these elements and collapse them together, really we have nothing more than an access controller allowing access to information, the door opening or closing.

[00:09:17] Speaker 04:
And this court in Smart Systems, Accenture, Smartfish, and Prism, all of these cases have explained that merely having access to data, the door opening or closing, that is not enough.

[00:09:29] Speaker 04:
We have to have something more.

[00:09:30] Speaker 04:
Now my friends from Erickson, they point to Enfish,

[00:09:33] Speaker 04:
Atrix, Data Engine, and the new case, and Quora.

[00:09:37] Speaker 04:
All of these cases do say that you can have claims that are patent eligible, but they have to have something more than just this access concept.

[00:09:45] Speaker 04:
They have to have, for example, a data structure of Enfish, something tangible.

[00:09:50] Speaker 04:
And that's why under either Alice 1 or Alice 2, these claims would not be eligible.

[00:09:55] Speaker 01:
Can I just turn you because the clock is running to the damages question.

[00:09:59] Speaker 01:
So the play here was that the district court originally thought there was a problem and then he reconsidered it and went back.

[00:10:09] Speaker 01:
And I looked briefly at the briefing with respect to those different scenarios and it wasn't clear to me from the briefing why he changed his position.

[00:10:19] Speaker 01:
So do you have anything that's in the record that would enlighten that?

[00:10:23] Speaker 04:
The two things that the judge did that we believe led to the reversal of the decision to reconsider are two-fold and frankly we believe that they're based upon a misreading of power integrations and laser dynamics.

[00:10:37] Speaker 04:
Because in power integrations and laser dynamics, as the court knows, it makes clear that you have to have an apportionment.

[00:10:44] Speaker 04:
And that was one of the main arguments that was in the briefing on the motion for a new trial, which the judge originally granted.

[00:10:51] Speaker 04:
He then reconsidered and decided against that for two reasons.

[00:10:54] Speaker 04:
One reason is he said that TCL had not focused on what other patented features there were of record to show apportionment.

[00:11:03] Speaker 04:
Well, TCL didn't need to show that there were other patented features.

[00:11:07] Speaker 04:
We only needed to show that there were other features to the phone.

[00:11:10] Speaker 04:
So we have a phone, which even Erickson's expert admits, has thousands of features.

[00:11:15] Speaker 04:
And Erickson's expert also admitted that there are certain must-have features.

[00:11:20] Speaker 04:
For example, a microphone, camera, and other things that he noted, Bluetooth, so forth.

[00:11:24] Speaker 04:
So of these thousands of features, there was no apportionment.

[00:11:27] Speaker 04:
So the judge, Judge Payne, he incorrectly understood that it was not

[00:11:32] Speaker 04:
other features but other patented features and he said well because TCL had not shown there were other patented features then he changed his mind.

[00:11:40] Speaker 04:
The second thing that he pointed to was royalty stacking and again we believe it was a confusion on the part of the court in the Eastern District of Texas where he said well

[00:11:49] Speaker 04:
Because you could have more than one patented feature to be licensed and you could have royalty stacking and there's not enough evidence on that.

[00:11:56] Speaker 04:
That wasn't our argument.

[00:11:58] Speaker 04:
Our argument there was a failure of apportionment, not that there was an issue with royalty stacking.

[00:12:02] Speaker 04:
So those were the two errors that he

[00:12:05] Speaker 04:
the two erroneous approaches that he used in reversing his decision to have a new trial.

[00:12:11] Speaker 04:
But we believe that there are basically two main reasons why the damages are incorrect.

[00:12:17] Speaker 02:
I can't recall.

[00:12:18] Speaker 02:
Did Judge Payne at all point to the price sensitivity and willingness to pay theories that were represented in that one chart?

[00:12:30] Speaker 02:
Not at all, Your Honor.

[00:12:32] Speaker 04:
No, Your Honor.

[00:12:34] Speaker 04:
The first time that the alternative two theories were brought up was in the motion for reconsideration on the new trial loan damages.

[00:12:42] Speaker 04:
And under the Projima case written by Your Honor, if you don't bring an argument

[00:12:49] Speaker 04:
In the jury trial, and they didn't even bring it until after the reconsideration, you cannot bring it late.

[00:12:55] Speaker 04:
So basically what we believe happened is we brought our J-Mall on the damages issue, they saw they had an issue, which was on their primary theory, which is willingness to buy, and then they tried to bootstrap these additional arguments, price sensitivity and willingness to buy, which were never presented.

[00:13:11] Speaker 04:
Now, my friend from Erickson may get up here and say, well, the jury did see our survey, and on our survey, the words, these words, price sensitivity and willingness to buy were on the survey.

[00:13:23] Speaker 04:
Problem is, is under the Whitserv case, this court has made clear that the jury has to have guideposts, it has to have something to say, aha, there's the alternative theory.

[00:13:33] Speaker 04:
Well, there was no argument, no presentation, nothing that was presented to the judge or the jury, until the motion for reconsideration,

[00:13:40] Speaker 04:
Now I'm confused.

[00:13:43] Speaker 00:
You say the jury has to have guideposts, but it's not your responsibility to bring forward a guidepost that would affect the findings in your favor?

[00:13:56] Speaker 04:
Well, since we only had one argument that was presented, it was the willingness to buy theory, then we only responded to that theory.

[00:14:03] Speaker 04:
The other two theories were never argued, asserted.

[00:14:06] Speaker 04:
They could have solved the problem by saying, or they could have asked their expert.

[00:14:10] Speaker 00:
You're saying it's their responsibility to raise an argument that favors you?

[00:14:15] Speaker 04:
It's their responsibility to raise their argument.

[00:14:17] Speaker 04:
These were their three alleged arguments.

[00:14:20] Speaker 04:
They picked one and they did not use the other two.

[00:14:24] Speaker 04:
So it's only our responsibility, because they have the burden of proof, to respond to their arguments.

[00:14:28] Speaker 00:
So you remain silent and what's the jury supposed to think?

[00:14:32] Speaker 04:
Well, the jury only had one argument presented and that's the argument that we responded to.

[00:14:36] Speaker 04:
They did not argue the other two.

[00:14:39] Speaker 00:
Yes, what's the jury supposed to think?

[00:14:40] Speaker 00:
Therefore, they decide, they take a position that you're now telling us we need to rethink and reconsider.

[00:14:50] Speaker 04:
Well, we don't think that the jury would have anything to think because the jury would not have even considered these alternative theories because they were never presented.

[00:14:57] Speaker 04:
So we don't think the jury would have had that.

[00:14:59] Speaker 04:
They're going to argue it was on a piece of paper, but that piece of paper was never presented in any way.

[00:15:05] Speaker 04:
In fact, when the jury saw the highlighted survey, which is a one-page survey, they focused in on only one portion of the survey, and that's the willingness to buy.

[00:15:14] Speaker 04:
There's a chart in Erickson's brief.

[00:15:16] Speaker 00:
This is an adversary system.

[00:15:17] Speaker 00:
This is an adversary system.

[00:15:21] Speaker 00:
There are perhaps arguments on your side, but if they weren't presented to the jury, it's not in keeping with the jury system to ask us to rethink what should have been before the jury.

[00:15:39] Speaker 04:
Well, I'm certainly not asking that you rethink what was before the jury.

[00:15:42] Speaker 04:
I'm only asking you to consider only what was before the jury.

[00:15:45] Speaker 04:
And the only thing before the jury was one theory, and that's the willingness to buy theory.

[00:15:49] Speaker 04:
And under Projima and Witzer, that would not be something that the jury had considered because they were not told about it.

[00:15:55] Speaker 04:
They can't consider it if they haven't been told.

[00:15:57] Speaker 00:
But that theory supports the verdict.

[00:16:00] Speaker 04:
That theory still does not support the verdict.

[00:16:02] Speaker 04:
Thank you, Your Honor, for asking about that.

[00:16:04] Speaker 04:
Because that theory, the alternative two theories, are still based upon the erroneous survey, which did not have appropriate apportionment.

[00:16:11] Speaker 04:
That's a very important fact.

[00:16:13] Speaker 04:
The survey is erroneous under all three theories, not just the first theory.

[00:16:17] Speaker 04:
So all the arguments in our brief as to why the survey is incorrect for failing to apportion, those arguments are applicable to all three.

[00:16:24] Speaker 04:
So the same defect infects the entire survey.

[00:16:28] Speaker 01:
Thank you.

[00:16:37] Speaker 03:
Good morning and may it please the court.

[00:16:40] Speaker 03:
Turning first to damages.

[00:16:43] Speaker 03:
Ericsson presented as the crux of its damages model, its damages theory, a hypothetical negotiation.

[00:16:50] Speaker 03:
And economists testified that in the hypothetical negotiation between Ericsson and TCL, there would be a bargaining range, the top of which would be $3.42, and the bottom of which would be something above zero.

[00:17:03] Speaker 01:
Yeah, but the whole basis for this is 28%.

[00:17:05] Speaker 01:
So, right?

[00:17:08] Speaker 01:
I mean, the 28% is pivotal to the... No.

[00:17:11] Speaker 02:
No?

[00:17:11] Speaker 02:
No, it's not.

[00:17:12] Speaker 01:
Okay.

[00:17:13] Speaker 02:
That's the only testimony I saw during trial.

[00:17:16] Speaker 03:
Is that fair to say?

[00:17:19] Speaker 03:
That was the only testimony during trial, yes, but... Did anybody ever say $3.52 of trial?

[00:17:25] Speaker 03:
No.

[00:17:27] Speaker 03:
But there was a document that was admitted into evidence by agreement of the parties, pre-admitted before the trial.

[00:17:34] Speaker 03:
It is in the evidentiary record, PX 109, page 4.

[00:17:39] Speaker 03:
It's in page 5261 of the appendix.

[00:17:43] Speaker 03:
That document was relied upon by Erickson's expert

[00:17:47] Speaker 03:
which is in the prior page of the appendix 5256.

[00:17:50] Speaker 03:
The expert calculated the top end of the bargaining range in the hypothetical negotiation based on both willingness to pay and willingness to buy survey inputs.

[00:18:02] Speaker 03:
Used both of those.

[00:18:04] Speaker 03:
And the document that provides the predicate for that was a pre-admitted document.

[00:18:10] Speaker 03:
It is entitled to equal dignity as testimony when a reviewing court is looking at sufficiency of the evidence.

[00:18:16] Speaker 03:
We can't ignore an admitted trial exhibit that was shown to the jury.

[00:18:21] Speaker 02:
If I was to accept the idea that willingness to buy, price sensitivity and willingness to pay are three separate theories, three separate models for the damages, then I don't see how

[00:18:37] Speaker 02:
You get to now utilize those two other theories that were never actually presented to the jury as a justification for what may well be a flawed single theory that was presented to the jury.

[00:18:53] Speaker 03:
They aren't alternative theories.

[00:18:55] Speaker 03:
They're factual inputs.

[00:18:57] Speaker 03:
The damages model that was used was the hypothetical negotiation.

[00:19:02] Speaker 03:
What would TCL have been willing to pay?

[00:19:04] Speaker 03:
Because what is the value of this feature to TCL?

[00:19:08] Speaker 02:
Why is it that the actual profits that TCL made are used as the inputs for what the hypothetical negotiation would have been ex ante?

[00:19:19] Speaker 02:
That confused me, because I thought in cases like AquaShield, we explained pretty clearly that you're not supposed to work ex post in that way, and just immediately assume that ex ante the defendants would have made the very profits that they actually made.

[00:19:42] Speaker 02:
You'll know that in the first instance.

[00:19:45] Speaker 03:
Because this is the real world of the hypothetical negotiation.

[00:19:48] Speaker 03:
In the hypothetical negotiation, TCL shows up to get a license to this patent.

[00:19:53] Speaker 03:
It was uncontroverted in that circumstance, number one, that

[00:19:58] Speaker 03:
All its major competitors in the United States, Apple, Samsung, LG, and HTC have licensed this patent from Ericsson, and they have this feature in their product.

[00:20:06] Speaker 03:
So that TCL doesn't have the feature, it's the outlier.

[00:20:10] Speaker 03:
Number two, TCL had no ability, and this is also in the record, to modify the Android code.

[00:20:17] Speaker 03:
It didn't have that capability.

[00:20:19] Speaker 03:
And so third, TCL has to get a license, and the reality is of the survey, that if they don't get a license,

[00:20:28] Speaker 03:
And they have to not use this feature, which allows individual feature-by-feature permissions to be granted or denied to apps.

[00:20:37] Speaker 03:
They don't have the same feature everyone else has.

[00:20:39] Speaker 03:
They're going to lose 20% of their sales.

[00:20:42] Speaker 03:
So when TCL goes to the hypothetical negotiation, that's what they're trying to bargain to avoid.

[00:20:51] Speaker 03:
There's an alternative ground too, though, and that's the willingness to pay.

[00:20:55] Speaker 03:
Under the willingness to pay, which is $3.52 a dime more, TCL realizes that their consumers will value this feature in their phones at $3.52.

[00:21:06] Speaker 03:
So any outcome in the bargain, less than that, is an optimal utility improving solution for TCL.

[00:21:17] Speaker 03:
And so we're going back to the hypothetical negotiation.

[00:21:22] Speaker 03:
And in the context of that, we've got to look at the real world situation that TCO was in and why it needed a license.

[00:21:30] Speaker 01:
Why don't we turn to the one on initiative?

[00:21:32] Speaker 01:
Yes, Your Honor.

[00:21:37] Speaker 01:
Leaving aside for a moment the waiver question.

[00:21:40] Speaker 01:
If this issue is properly preserved, why doesn't this alive exactly with a bunch of our other cases?

[00:21:47] Speaker 01:
This is just controlling access.

[00:21:56] Speaker 03:
Because this is a

[00:21:58] Speaker 03:
that creates an architecture or a structure within a computer to provide a better result, to improve the functionality of that computer.

[00:22:08] Speaker 03:
So in other words, this allows a user to tell a social media app, I will give access to my camera, but not to my location or my contacts on an app by app, function by function basis, which did not previously exist.

[00:22:26] Speaker 03:
To accomplish that,

[00:22:29] Speaker 03:
The patent sets up a tiered or a layered architecture.

[00:22:35] Speaker 01:
And there's three... Let me ask you about that, because I'd just like to talk about what is actually claimed.

[00:22:42] Speaker 01:
And it seems to me you relied in your brief on a great deal of stuff that wasn't actually claimed.

[00:22:47] Speaker 01:
Because the claim, as I understand it, doesn't include a discussion of vertical or horizontal stacks, or transport protocols, or all of the stuff that you're relying on to justify the 101 now.

[00:23:01] Speaker 03:
Well, turning to claim one,

[00:23:05] Speaker 03:
The first element of the claim sets up an application domain that is separate from the software services component.

[00:23:12] Speaker 03:
And Your Honor, in answering your question, I'm going to first look at the claim language and then I'm going to turn to the specification for context.

[00:23:18] Speaker 03:
Sticking just to the claim language for now, we have an application domain that is separate from the software services component.

[00:23:26] Speaker 03:
So you have an application, the three layers are the application domain, the interception module, or excuse me, the interface module, and then finally the software services.

[00:23:38] Speaker 03:
The application or the apps, we can think of it that way, the software services are the things like the camera,

[00:23:44] Speaker 03:
the other things on your phone that the app would like to access.

[00:23:49] Speaker 03:
The first element provides that the interface component, quote, is controlling access by apps to the software services domain.

[00:23:58] Speaker 03:
In other words, it sits in between.

[00:23:59] Speaker 03:
That's how it controls access.

[00:24:01] Speaker 03:
Then, going further down, the interception module in the third element.

[00:24:06] Speaker 03:
That is claimed that it intercepts requests for access from the apps, then checks the security module, which holds permissions the user has granted, and then the final element.

[00:24:18] Speaker 03:
It says only if the request is granted is the app granted access to the software services, and that confirms that there is this intervening layer.

[00:24:28] Speaker 03:
Now turning to the specification for context, I'd like to point your honors to

[00:24:33] Speaker 03:
five or six portions of the specification that I think make clear the layering and also the separation of these different functions.

[00:24:43] Speaker 03:
Column four?

[00:24:44] Speaker 02:
I mean, to me, I'm sorry.

[00:24:46] Speaker 02:
I mean, it sounds a little bit like a security guard in the lobby of an office building, right?

[00:24:52] Speaker 02:
And then a person comes in and wants access to a certain floor or business or person that works there.

[00:24:59] Speaker 02:
And then the security guard's gonna check the list.

[00:25:02] Speaker 02:
Is this person been approved to come upstairs?

[00:25:07] Speaker 02:
Yes or no?

[00:25:08] Speaker 02:
If yes, okay, you can walk through and head to the elevator.

[00:25:12] Speaker 02:
If not, then you don't get to go in, and so you don't get access.

[00:25:17] Speaker 02:
And I know that's a very

[00:25:19] Speaker 02:
Simple crude analogy but to me that feels akin to what you just described in terms of certain applications wanting to access certain native software on a cell phone or not even a cell phone just any system.

[00:25:37] Speaker 03:
But it's more than that because to be able to accomplish the functionality and this is an apparatus claim you have to have the architecture in place which is the separation of the components that didn't exist.

[00:25:49] Speaker 03:
It's when you have the separation and then you create the interface pathway between the apps and the software services that you have created an architecture that then allows you to put in place these rules and these procedures.

[00:26:04] Speaker 02:
I mean, you're not talking about some kind of physical barrier, are you?

[00:26:11] Speaker 03:
It is a barrier.

[00:26:12] Speaker 03:
It is a barrier that exists in the code, and the specification confirms that.

[00:26:18] Speaker 03:
Column 4, lines 37 to 38 say the apps are isolated from the rest of the components and must access those by the interface.

[00:26:28] Speaker 03:
The specification discloses figure 3 as showing the actual layering, and it says in addition to a plurality of horizontally portioned functional software units, there are also vertically partitioned

[00:26:45] Speaker 03:
software units as well.

[00:26:46] Speaker 03:
So it has a vertical partition, which is the software services, the various functions of the phone can't talk to each other.

[00:26:55] Speaker 03:
but there's also a horizontal partitioning, which means that a higher level layer, like the apps, cannot communicate or use the software services unless they're granted permission through the interface.

[00:27:07] Speaker 03:
So that can happen, not just apps to software services, but also individual services can be singled out.

[00:27:13] Speaker 03:
That's the architecture that was created.

[00:27:16] Speaker 03:
This horizontal and vertical partitioning that's described at column five, lines 23 to 46,

[00:27:23] Speaker 03:
And also in column 5, lines 58 to 65, and in column 7, lines 1 through 25, that allows then the functionality to occur.

[00:27:34] Speaker 02:
And that's what I did not understand, the discussion in column 5, you know, with the layered stacks.

[00:27:42] Speaker 02:
Yes.

[00:27:42] Speaker 02:
Why does that make a difference to this claim?

[00:27:44] Speaker 03:
Because it's a computer architecture like the court has approved in Enfish and the other cases that we've cited.

[00:27:53] Speaker 02:
Why does that make the accessing of the native software easier or more efficient?

[00:28:03] Speaker 02:
I don't know, higher performing, more accurate.

[00:28:08] Speaker 02:
It didn't exactly pop.

[00:28:10] Speaker 03:
Okay, and I apologize if we didn't communicate well.

[00:28:14] Speaker 03:
If you had, for instance, a situation where, like in the prior art, apps would run in a sandbox, they couldn't use anything on the phone resources, and then you were to say, well, we'll get rid of the sandbox, then it gets to use everything.

[00:28:31] Speaker 03:
The only way you can accomplish

[00:28:33] Speaker 03:
App by app and service by service access.

[00:28:39] Speaker 03:
In other words, the ability to allow a social media app to access camera but not location or microphone or other things.

[00:28:51] Speaker 03:
The only way you can do that is to have this partitioning.

[00:28:54] Speaker 03:
The app can only access a software services component if it's allowed and it's that specific software services component.

[00:29:02] Speaker 03:
That architecture, that separation did not exist in the prior art.

[00:29:07] Speaker 03:
And the rules for the separation are contained in column five and column six for how that is accomplished.

[00:29:14] Speaker 02:
Where's that in the claim?

[00:29:16] Speaker 02:
Which words should I look at and see?

[00:29:20] Speaker 02:
Yes.

[00:29:20] Speaker 02:
This, what I know in your briefing you've referred to as fine granularity.

[00:29:25] Speaker 03:
Right.

[00:29:25] Speaker 03:
And keeping in mind, the claims are read in the context of the specification.

[00:29:30] Speaker 03:
You can find it in the first element, a software services component and an interface component.

[00:29:37] Speaker 03:
which are set out separately.

[00:29:39] Speaker 03:
The last element says wherein the requesting application domain software is granted access to the software services component via at least one interface if the request is granted.

[00:29:51] Speaker 03:
That's the control part of it.

[00:29:53] Speaker 03:
But it also has an access controller for controlling access to the software services component.

[00:29:58] Speaker 03:
And I think controlling access in the context of the specification means

[00:30:03] Speaker 03:
Apps don't get to access this unless the request is granted.

[00:30:06] Speaker 03:
That's the wall that is set up.

[00:30:09] Speaker 03:
By requesting application domain software via the at least one interface.

[00:30:13] Speaker 03:
So the structure that's set up is apps are separate from software services.

[00:30:18] Speaker 03:
And software services are the functions of the phone that an app wants to use.

[00:30:22] Speaker 03:
They can't access them.

[00:30:24] Speaker 03:
And they can only access them through the interface if permission is granted.

[00:30:29] Speaker 03:
That's a software architectural structure that is being set up in this patent.

[00:30:33] Speaker 03:
And I think that is far more than abstract.

[00:30:37] Speaker 03:
That takes it now to the level of a new result, the result being, and the patent also talks about cost and other savings and efficiency of programming in it, but in addition to that, it allows users to have a new function, which is app by app, service by service ability to grant and deny permissions in real time when the app is looking to invoke

[00:31:05] Speaker 03:
the services of the mobile phone.

[00:31:09] Speaker 02:
So it's the phrase for controlling access to the software services component that I should be looking at.

[00:31:15] Speaker 02:
And then when I look at that, I should think about that software architecture that's being described in column five.

[00:31:22] Speaker 03:
Yes, and the access controller is set up for having an interception module.

[00:31:27] Speaker 03:
So the concept of interception is there.

[00:31:29] Speaker 03:
which means it means receiving a request to access right before interception means before the software services can be invoked so it stands in the way interception and a decisioning entity for determining if the request should be granted and then the last element which is access is granted if the request passes or if the request is granted

[00:31:56] Speaker 03:
So I think that is what is set up.

[00:31:58] Speaker 03:
It's both rules, but it's more than that.

[00:32:01] Speaker 03:
It's the actual partitioning or the layering of the software, and the layering is discussed in detail through columns five, six, and seven of the patent.

[00:32:13] Speaker 03:
It's very clear that the layering and the partitioning was extremely important in how the software was set up.

[00:32:22] Speaker 03:
Thank you.

[00:32:23] Speaker 03:
Thank you, Your Honors.

[00:32:29] Speaker 01:
after two minutes of your bath.

[00:32:31] Speaker 04:
Three quick points, Your Honor.

[00:32:33] Speaker 04:
I think that, as you saw, my friend from Erickson was struggling to explain why the claims would be eligible.

[00:32:40] Speaker 04:
Every time that the court asked about particular elements of the claims, what did my friend do?

[00:32:45] Speaker 04:
He went to the specification.

[00:32:47] Speaker 04:
There's simply nothing in the claims that makes this eligible.

[00:32:51] Speaker 04:
In fact, when he was referring to the separate architecture, he again had to go to the specification to explain how they were different.

[00:32:58] Speaker 04:
But as I noted at trial before the jury,

[00:33:01] Speaker 04:
The expert collapsed all of these elements into nothing more than a gateway.

[00:33:05] Speaker 04:
So that's the first point on eligibility.

[00:33:07] Speaker 04:
On damages, the point I would make is whether or not any of the three analyses are considered, we submit only the first to be considered, but whether or not all of them are,

[00:33:17] Speaker 04:
How can a survey that results in 28% of the value of a mobile phone be a correct apportionment?

[00:33:25] Speaker 04:
What we had here is we had TCL makes mobile phones, but we don't have the operating system.

[00:33:31] Speaker 04:
We get the operating system from Google.

[00:33:33] Speaker 04:
And that Google operating system has one feature on it that is the feature of limited accessibility for applications.

[00:33:39] Speaker 04:
That's the claim feature.

[00:33:40] Speaker 04:
How can of the thousands of things on the phone, including the ability to make a call and having a photo and everything else, 28% of the value of that be appropriately apportioned?

[00:33:51] Speaker 04:
That would be impossible.

[00:33:53] Speaker 04:
And the record shows that.

[00:33:54] Speaker 04:
Third point, Your Honor, is unwillfulness.

[00:33:57] Speaker 04:
On willfulness, there is... Well, wait a minute.

[00:33:59] Speaker 01:
You didn't argue willfulness the first time around, so your friend didn't have an opportunity to respond.

[00:34:04] Speaker 01:
Fair point, Your Honor.

[00:34:04] Speaker 04:
Thank you.

[00:34:06] Speaker 04:
I have nothing further unless there's any questions.

[00:34:07] Speaker 02:
What do you want to say about the other side's position that the claimed invention is talking about a very specific software architecture and through that specific software architecture you can now have in a granular way

[00:34:30] Speaker 02:
approvals or disapprovals of access to individual software units inside the native code.

[00:34:40] Speaker 04:
So none of that is supported in the claim.

[00:34:43] Speaker 04:
Your honor, I ask whether or not that's in the claim, and I believe my friend from Harrison conceded it's not.

[00:34:48] Speaker 02:
Secondly, I think

[00:34:50] Speaker 02:
He didn't concede that.

[00:34:51] Speaker 02:
I think he's making the argument that yes, when you understand this claim in light of the specification, now all of a sudden you look at a rather intricate software architecture as described in column five.

[00:35:06] Speaker 02:
So what I'm trying to figure out is, does that make a difference or not?

[00:35:11] Speaker 04:
It does not make a difference that helps Erickson.

[00:35:14] Speaker 04:
The one case that he cited before you was the Enfish case, and in the Enfish case there was a specific self-referential table, a specific type of data structure that was claimed.

[00:35:26] Speaker 04:
That type of specific specificity is simply not in these claims.

[00:35:31] Speaker 04:
And even if, I think what my friend from Ericsson was trying to do is he was trying to say, well, even if I fail step one, and it is an abstract idea, somehow I may get step two, but he also can point to nothing that's a tangible or physical result that's claimed, that comes from his claim, that would bring it into step two as well.

[00:35:49] Speaker 04:
So there's really nothing of record that supports the eligibility on either one of those, Alice 1 or Alice 2.

[00:35:58] Speaker 01:
Thank you.

[00:35:58] Speaker 01:
We thank Fox Science in the case