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

[00:00:04] Speaker 03:
Again, we're hearing the case in 18-1722, e-video versus United States.

[00:00:09] Speaker 03:
And again, I apologize for having forgotten that you were still here.

[00:00:13] Speaker 03:
Please proceed.

[00:00:15] Speaker 00:
Thank you, Your Honor.

[00:00:17] Speaker 00:
Please record.

[00:00:18] Speaker 00:
I'm Patrick Delaney, here for e-video.

[00:00:22] Speaker 00:
I basically have three points I want to cover.

[00:00:24] Speaker 00:
First of all, with regard to the question of res judicata,

[00:00:28] Speaker 00:
There was a prior proceeding.

[00:00:31] Speaker 00:
I referred to that as SAWS 1.

[00:00:33] Speaker 00:
I refer to this proceeding now as coming out of SAWS 2.

[00:00:37] Speaker 00:
There was a very, very different set of pleadings for these two matters.

[00:00:42] Speaker 03:
Well, what's the difference?

[00:00:43] Speaker 03:
Why don't you focus in on what the difference is?

[00:00:45] Speaker 00:
Well, the big difference is that in the second proceeding, SAWS 2, we added a whole lot more of an explanation of the jurisdictional facts.

[00:00:55] Speaker 03:
This is the MPEP stuff?

[00:00:56] Speaker 00:
The MPP has the offer, yes, also everything about the director being the authoritative negotiator for the government.

[00:01:05] Speaker 00:
Basically, we went through all the elements in detail for the implied and fact contracts and added them to the complaint.

[00:01:12] Speaker 00:
So they were worked into the complaint.

[00:01:14] Speaker 00:
Now, the underlying point of contention is 35 USC 132A and then the regulatory provision that comes from that.

[00:01:26] Speaker 00:
that appeared in the saw as one complaint as well.

[00:01:28] Speaker 00:
And this court and the Court of Claims found that it was an implied-in-law, the contract, if it was just based... It didn't have jurisdiction because they found it was an implied-in-law contract.

[00:01:40] Speaker 00:
Correct.

[00:01:42] Speaker 03:
So what makes the difference here to make it, you're arguing your new pleadings made it an implied-in-law, the issue, an implied-in-fact contract?

[00:01:52] Speaker 00:
Correct.

[00:01:53] Speaker 00:
Correct, Your Honor.

[00:01:54] Speaker 03:
Tell us, explain that one to me.

[00:01:55] Speaker 00:
Well, yes, the difference is that the implied in fact contract here is the offer arising from the patent office to examine the patent applications.

[00:02:07] Speaker 00:
It is not the offer to comply with 132A and give notice that the applications were in the SALS program.

[00:02:17] Speaker 00:
That is a small sub-condition of the offer, but the overall implied in fact contract

[00:02:24] Speaker 00:
is the overall contract based on the USPTO saying the offer is if you bring your patent application to us and pay the fees, we will examine your patent application.

[00:02:33] Speaker 03:
But that was the same issue that the court confronted in the first instance.

[00:02:37] Speaker 03:
So I'm just trying to discern what's the difference between this case and the earlier case.

[00:02:40] Speaker 00:
Well, if I could give you a hypothetical example based on the closest analogous case that I could find for the Supreme Court, the Salomon case.

[00:02:53] Speaker 00:
involved the vendor with the corn, bringing the corn to the government contractor.

[00:03:00] Speaker 00:
And the contract had expired by time.

[00:03:04] Speaker 00:
But the court found that there was an implied-in-fact contract in that, based on the actions of the parties and the prior prices, even if there was no verbal contract, there was still an implied-in-fact contract.

[00:03:18] Speaker 00:
And if you take a look, what happened was is that the court of claims in this second case has dissected out one part of the implied-in-fact contract and seen it as an implied-in-law contract based on that one part being dissected out.

[00:03:36] Speaker 00:
And it was the notice provision from 132A.

[00:03:40] Speaker 00:
Now, it's the analogy that I'm trying to make with the Salomon case here would be,

[00:03:44] Speaker 00:
is that if you were to dissect out the implied, in fact, contract that there was the duty of the government to pay the fee for the corn.

[00:03:53] Speaker 00:
If you were to dissect that out, you could also call that an implied-in-law contract.

[00:03:57] Speaker 00:
But in fact, if you look at it, if you look at that condition within the overall framework of the total contract, you know, the offer and the acceptance and the consideration, if you look at it within the total framework, you can't dissect out that one condition.

[00:04:12] Speaker 00:
It's just a critical condition of performance.

[00:04:14] Speaker 00:
of the overall implied-in-fact contract.

[00:04:20] Speaker 00:
So what I'm trying to say is that the pleadings for the SALIS II complaint has a large, much better explanation of the overall framework of the implied-in-fact contract in that by dissecting out the notice provision as

[00:04:40] Speaker 00:
The notice provision of 132A had been the primary fact that had been presented in the SAWS 1 complaint.

[00:04:47] Speaker 00:
The SAWS 2 complaint also points out that this notice provision was violated.

[00:04:52] Speaker 01:
But it is not... Can I take you back to the question that the Chief Judge asked you earlier?

[00:04:57] Speaker 01:
Because I guess I still don't understand what are the sufficient new facts to confer jurisdiction over what we previously held was an implied law contract.

[00:05:09] Speaker 01:
What is the new stuff you pled in the Solace II complaint that you think moves it outside of an implied in law contract?

[00:05:19] Speaker 00:
I actually took out all those provisions from the Solace II complaint and I put them in the reply brief.

[00:05:25] Speaker 00:
They're all listed there verbatim.

[00:05:27] Speaker 00:
We quoted about just about 20 countries, about 20 paragraphs.

[00:05:31] Speaker 00:
in the reply brief.

[00:05:33] Speaker 03:
Well, you ought to be able to summarize at least what the most important one is.

[00:05:37] Speaker 00:
Oh, yes.

[00:05:37] Speaker 00:
All right.

[00:05:37] Speaker 00:
Well, certainly.

[00:05:38] Speaker 00:
Certainly.

[00:05:38] Speaker 00:
Certainly.

[00:05:40] Speaker 00:
Well, the offer is the overall offer from the Patent Office to perform patent examination procedure based on the acceptance by the patent applicant.

[00:05:53] Speaker 00:
The acceptance by the patent applicant is executed by the patent applicant filing the patent application

[00:05:58] Speaker 00:
and paying the initial fees.

[00:06:01] Speaker 00:
And this is a performance contract that takes place over the course of the examination of the patent application.

[00:06:08] Speaker 00:
Now, one of the most important aspects of the patent examination process is that the PTO will explain why they are rejecting a patent application.

[00:06:19] Speaker 00:
And what I'm pointing out is that, is by, is by designating the application into the SAWS program, that, and, and without, without giving any notice or telling the patent applicant that it was in, that it was, that the patent application was being held up because it was in the SAWS program, it was not, it was not explaining how the patent applicant could cure whatever defects were in the patent application to expedite or to get the ca, patent application allowed into a patent.

[00:06:50] Speaker 01:
I guess I don't understand how that would confer jurisdiction.

[00:06:56] Speaker 01:
What am I missing?

[00:06:58] Speaker 00:
Well, the jurisdiction of the Tucker Act there would arise under the implied in fact contract aspect of the Tucker Act.

[00:07:04] Speaker 01:
And you believe that there is an applied in fact contract between the Patent Office?

[00:07:12] Speaker 01:
I just don't understand the argument.

[00:07:13] Speaker 01:
I'm sorry.

[00:07:14] Speaker 00:
Well, the Patent Office advertises, and it

[00:07:19] Speaker 00:
It has a very, very detailed MPEP that explains exactly how it is going to perform a patent application on any application.

[00:07:31] Speaker 00:
And it is a large document that explains the course of conduct.

[00:07:35] Speaker 03:
So those details, your inclusion of those details in the second complaint, what would differentiate this from being an implied in law contract versus an implied in fact contract?

[00:07:45] Speaker 00:
Yes, Your Honor.

[00:07:47] Speaker 03:
Why don't we hear from the government?

[00:07:49] Speaker 00:
I just had one small other point I wanted to make, if I may.

[00:07:56] Speaker 00:
Sure, sure.

[00:07:58] Speaker 00:
One of the things that I noticed about Supreme Court jurisprudence on implied and fact contracts were almost all patent cases from before we had section – I think it's 1420 – excuse me – 1498A, before 1948.

[00:08:18] Speaker 00:
You couldn't sue the federal government for patent infringement.

[00:08:22] Speaker 00:
But basically, you had the Supreme Court bending over backwards in numerous cases before that date to provide jurisdiction based on implied contracts between the inventor or the patent owner bringing the case and whatever part of the government they were suing.

[00:08:41] Speaker 00:
And I slayed all these cases in my brief, but I was just

[00:08:45] Speaker 00:
amazed at how far the Supreme Court jurisprudence had favored finding implied-in-fact contracts on behalf of the inventors or the patent owners.

[00:08:55] Speaker 00:
Most of them were inventors as patent owners when they brought the cases against the federal government.

[00:09:00] Speaker 00:
And I'm not saying that this should be a determining factor here, but I'm thinking in terms of it should be a factor for consideration in finding an implied-in-fact contract for the inventors of the patent applications in this case.

[00:09:15] Speaker 00:
They've given the same quid pro quo.

[00:09:17] Speaker 00:
They've disclosed their invention to the public.

[00:09:20] Speaker 00:
They've entered the patent application process.

[00:09:23] Speaker 00:
So they've already given something of a gift to the public.

[00:09:26] Speaker 00:
So it's just a consideration on the equities that I wanted to bring to your attention.

[00:09:32] Speaker 03:
Thank you.

[00:09:32] Speaker 03:
We'll recess for you in a minute.

[00:09:53] Speaker 03:
We're ready, Mr. Chairman.

[00:09:57] Speaker 02:
Good afternoon, Your Honors, and may it please the court, Nicholas Kim, for the government.

[00:10:01] Speaker 02:
One brief point in rebuttal in regard to the 1498A issue that was brought up with regard to a supposed preference for implied contracts.

[00:10:13] Speaker 02:
As we've pointed out in our briefs, that certainly does not apply in this situation.

[00:10:17] Speaker 02:
We're not talking about use by the government of a patented invention

[00:10:23] Speaker 02:
We are talking.

[00:10:23] Speaker 02:
What would you say are the differences between this case and the last one?

[00:10:29] Speaker 02:
And by the last one you mean saw as one, your honor?

[00:10:34] Speaker 02:
It boils down to additional citations to the MPEP.

[00:10:39] Speaker 02:
And we would submit that because the MPEP is entirely circumscribed by the relevant statutes and the implementing regulations, it adds nothing of substance to the jurisdictional issue.

[00:10:56] Speaker 02:
And I'm happy to answer any questions that the court may have.

[00:11:01] Speaker 03:
Thank you.

[00:11:02] Speaker 02:
Thank you.

[00:11:16] Speaker 00:
Just as a point for the record, in the argument section of the reply brief,

[00:11:22] Speaker 00:
We point out there's numerous associations to the MPEP, but there's also – there's an explanation of the USPTO director as the primary negotiator for the federal – the authoritative negotiator for the federal government.

[00:11:41] Speaker 00:
And there's a long explanation about how it's not just the MPEP, but how it is the course of conduct and the payment of fees between the parties, between the patent applicant and the USPTO that is the basis for the implying fact contract here.

[00:11:58] Speaker 00:
So if I could go through all of the explanation, there's an explanation of what the consideration is.

[00:12:09] Speaker 00:
The consideration is the payment of fees by the applicant.

[00:12:12] Speaker 00:
The acceptance is the filing of the application and the ongoing filing of different papers throughout the course of the patent examination.

[00:12:24] Speaker 00:
And there's intent to be bound that is shown by the parties, by their participation in the process.

[00:12:31] Speaker 00:
Basically, I've gone through all the elements of the implied in fact contract and listed them out in great detail.

[00:12:36] Speaker 00:
It's much more than just the NPEP.

[00:12:39] Speaker 03:
Thank you.

[00:12:41] Speaker 03:
All rise.